The Florida Office of Insurance Regulation said that for thesecond time this week, it has approved rates for a large homeownersinsurer that are substantially below what was initiallyrequested.

OIR said it authorized a revised overall rate increase filing of16.3 percent for United Services Automobile Association and USAACasualty Insurance Company after the carriers originally sought a40 percent hike.

Earlier, the OIR approved revised rate filings submitted byAllstate Floridian Insurance Company and Allstate FloridianIndemnity Company of 8.2 percent for each. Allstate Floridian andAllstate Indemnity originally requested average statewide increasesof 22.5 and 33.2 percent, respectively.

The revised rate filings followed public hearings at whichregulators questioned insurer profit-loading factors such as thecost for reinsurance, an OIR spokesman said.

The hearing for USAA and USAA Casualty was held Sept. 26, andafter the OIR issued a notice of intent to disapprove the filing,the company amended its filing and lowered the overall raterequests.

OIR cited a number of areas where the requests were notadequately supported, including USAA's and USAA Casualty's use ofan outdated private catastrophe model and failure to support anadditional profit load of 10 percent.

“While the rate I approved is far less than what the companyoriginally requested, I am fully aware that it is still going tohave a significant impact on the pocketbooks of USAA'spolicyholders,” said Insurance Commissioner Kevin McCarty.

The approved rate changes for all the companies are effectivefor new and renewal business as of mid February.

Allstate companies were the subject of a public hearing on Nov.2, which led it to amend its filing and lower the rate requests to19.1 percent for Allstate Floridian and to 26.4 percent forAllstate Indemnity.

With both the original filing and the amended filing, the OIRcited a number of areas where the requests were not adequatelysupported.

OIR said Allstate had asked to charge for reinsurance that ithad not yet purchased, “seeking to use any unexpected gainsproduced by policyholder premiums to further compensate its agentsrather than policyholders, and increasing its expense ratio,despite the fact it is cutting 240,000 policies.”

“There was little or no support for numerous aspects of thisrate hike in both the original filing and in the amended filing,”said Commissioner McCarty, “and the responses we received at thepublic hearing were not much better. However, these filings reflectrates that the Office determined were justified.”

Allstate Floridian last increased its rates by a statewideaverage of 16.3 percent, while Allstate Indemnity last boosted itsrates by a statewide average of 24.4 percent in October 2005.