Insurance regulators approve Liberty Mutual rate hike

Liberty Mutual insurance company won state regulators' approval today for an increase in its rates on Louisiana policyholders by an average of 13 percent, affecting about 24,000 homeowners.

The Louisiana Insurance Rating Commission voted, 2-1, to approve the hike. The 13 percent increase is a statewide average, meaning much higher hikes for policyholders closer to the hurricane-vulnerable Gulf Coast and possible reductions for those
further north.

Kelly Davis, Liberty Mutual's director of Louisiana operations, said the company has stopped writing new policies in storm-wracked parishes such as Orleans, but plans to continue insuring its existing customers along the coast.

At the request of Hartford Insurance Co. of the Midwest, the regulating panel postponed considering a homeowners policy rate
hike request from that company. The request, for an average increase of 35 percent, would affect 7,600 Louisiana policyholders.

The rating panel has authority to approve or reject any insurance rate increase of more than 10 percent. Insurers can increase rates by less than 10 percent without the panel's approval.

Gov. Kathleen Blanco has criticized the insurance industry in general for overreacting to Hurricanes Katrina and Rita, saying they are threatening the region's recovery by withdrawing coverage and charging exorbitant rates.

Blanco tried to assure more than 100 members of the Reinsurance Association of America that the state is on the right track, making Louisiana better protected against future storms.

The federal government has spent more than $1 billion to strengthen more than 100 miles of levees and floodwalls, Blanco said, and homes are more storm-resistant because the state has adopted its first statewide building code and the federal government has created new flood elevation maps.