Travelers Drops Filing And Challenge To N.Y. Insurance Department On L.I. Homeowners Rates.

• Position: [LOOKING BACK]

Travelers Insurance Company has withdrawn its plan to raise rates on homeowners insurance by over 20 percent for Long Island insureds, N.Y. Insurance Superintendent Salvatore R. Curiale has announced. The Superintendent said January 31 that anyone who has already paid the higher rate will receive a refund.

On October 29, 1993, the Insurance Department rejected the Travelers' proposal to increase rates, calling it excessive, and it ordered the company to keep its previous rates in effect The insurer had challenged the department's position and asked for an administrative hearing. Such a hearing was held, but, according to the Superintendent. Travelers has now decided to withdraw the rate hike and the challenge.

Curiale said that the department will not allow insurers to raise homeowners insurance rates "unless they can clearly demonstrate they have suffered losses." He added that his announcement of the Travelers' decision to hack off. "should send a message that we will not permit knee-jerk reactions by the industry. We will continue to monitor the shoreline marketplace on Long Island and stand ready to move forward with legislation to address concerns relating to the availability of homeowners insurance coverage."

Travelers had submitted a state-wide homeowners insurance rate increase of 4.1 percent but sought an average 17 percent for Nassau County and 22.5 percent for Suffolk County.

Curiale said a department analysis of the company's filing "revealed that these rate increases were based not on past claims, hut rather on elevated reinsurance costs and catastrophic loading factors projecting the...