In Connecticut, State Farm is asking for an increase with a maximum of 40 percent and an average of 38 percent on 48 policies sold from 2000 to 2002.
State Farm is no longer selling the policies in Connecticut, the company said in a rate filing posted on the Connecticut Department of Insurance website.
State Farm sold 44,726 policies in that series throughout the United States, and the company is asking for similar rate increases for all of the policies. The Connecticut policyholders have been paying an average of about $1,200 per year each in premiums.
Similarly, in Pennsylvania, State Farm is asking for an increase with a maximum of 40 percent an an average of 37 percent on 1,357 policies sold from 1998 to 2001. The policyholders have been paying an average of about $1,800 per year each in premiums for their policies, which are part of the same national block of business described in the Connecticut application.
In the filings, the company said it is asking for the rate increases mainly because policy lapse rates have been lower than expected, policyholder mortality has been lower than expected, and claims likely will be higher than expected.
To have a good chance of bringing the overall loss ratio on the block of business to the legal minimum of 65 percent, the company would have had to start out charging rates that were 198 percent higher than the actual rates when it sold the Connecticut policies and about 160 percent higher than the actual rates when it sold the Pennsylvania policies, the company said.