Nevada regulator rejects Farmers auto rate increase

Wednesday, April 23, 2003 | 9:48 a.m.

CARSON CITY -- State Insurance Commissioner Alice Molasky-Arman on Tuesday denied the request of Farmers Insurance Company for an average rate increase of 2.8 percent on 182,000 vehicles it insures in Nevada to collect an extra $4 million a year.

Molasky-Arman said the application was rejected because the proposed premium modifications differed too greatly between classes.

If the application had been approved, some motorists would have seen hefty increases while others would have had to pay only slightly more. There would have been discounts for those policyholders who insure their homes with Farmers and those who have good credit ratings. The new rates would have become effective in July. Farmers insures 96,236 vehicles in Clark County. The company last raised its rates in November 2002, by 1.5 percent. The company collected $147.9 million in premiums last year in Nevada.

The commissioner also denied the request by Mid-Century Insurance Company, an affiliate of Farmers Insurance, to proposed changes that would have resulted in close to no changes in rates. She said she has determined that Mid-Century's rates could be reduced and still remain adequate.

She directed her staff to pursue a rate decrease request from Mid-Century, which covers about 18,000 vehicles.

Farmers and Mid-Century can request reconsideration of the decision by requesting a hearing or they can submit new applications.