P.M. BRIEFING : Farmers Gets Rate Freeze Warning
State insurance officials will take Farmers Group Inc. to court or seek fines and other administrative sanctions if the big insurer defies a rate freeze, a lawyer for the Insurance Department said today.
A spokesman for Farmers, the state’s second-biggest auto insurer, said Friday that letters have been mailed to agents stating Farmers will ignore a rate freeze ordered by Insurance Commissioner Roxani Gillespie and raise its auto insurance rates in California an average of 5.9% on Nov. 1.
Reid McClaran, an attorney specializing in Proposition 103 for the department, said official notification of Farmers’ decision has yet to arrive, so he could not say exactly how the department will respond.
But he said the freeze was enacted as a regulation, and violating a regulation is similar to breaking a law.
“If someone violates our regulations we will take the appropriate action against them,” McClaran said.
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