On Aug. 12, Oklahoma Attorney General Gentner Drummond sent a scathing letter to Oklahoma Insurance Department Commissioner Glen Mulready, challenging the commissioner’s stewardship of homeowners insurance rates and questioning the commissioner’s claim that weather events and an existing competitive market justify ongoing inaction to curtail skyrocketing rates that have hobbled the budgets of Oklahoma families for years.
Drummond’s missive directly cited Oklahoma Watch’s coverage of homeowners rates and the state laws that govern the regulation of property insurance.
“The unconscionably high insurance premiums cited in a recent Oklahoma Watch article cause my office grave concern that the State of Oklahoma is not adequately protecting its consumers,” Drummond wrote. “Oklahomans should not have to bear these unwarranted costs.”
The letter specified that Oklahomans pay 2.5% of their home value on annual insurance premiums, four times the national average.
In January, Drummond announced a campaign for governor; it’s unclear whether the AG’s bid for higher office will feature homeowners insurance as a significant platform position.
Rate-making in Oklahoma operates on a file-and-use regulatory framework, which means that insurance companies can raise rates and begin charging customers without prior approval from any regulatory body. While in many file-and-use jurisdictions actuarial scrutiny immediately follows implementation to ensure that rates are not excessive for customers, that does not happen in Oklahoma.
Rates are scrutinized in Oklahoma to ensure that they are neither inadequate (for insurance company profits) nor discriminatory, but Section 989 of Title 36 prohibits scrutiny for excessive rates unless the commissioner has judged the market to be noncompetitive.
A noncompetitive market has been declared only once in Oklahoma, under legally murky circumstances.
In May, Mulready published a brief response to Oklahoma Watch’s initial coverage of homeowners insurance rates that included a defense of competitive markets in the state.
“Oklahoma has over 100 licensed companies to write homeowners policies; over 50 are writing new policies, providing consumers with plenty of choices,” Mulready said.
Oklahoma law lists a number of factors that may be used to determine whether a market is competitive; per statute, the commissioner may consider the total number of insurers, but no figure is specified in law to define either a competitive or noncompetitive market. On Oct. 7, in a question and answer session following Mulready’s testimony at an interim study on homeowners insurance organized by Senate minority leader Julia Kirt, Rep. Andy Fugate, D-Del City, noted that four companies, State Farm, Allstate, Farmer’s and USAA accounted for 60% of the market in 2024 when by some measures 50% share of the market by four companies is used to define a noncompetitive market.
Drummond’s letter appeared impatient with Mulready; the AG’s unflinching tone offered a pointed departure from the commissioner’s conclusion that the market in Oklahoma is competitive.
“It appears Oklahoma’s market for homeowners’ insurance is anything but competitive,” Drummond wrote. At the Oct. 7 interim study hearing, Mulready repeated long-standing claims that weather events were to blame for high rates.
In his August letter, Drummond disagreed vehemently.
“There is no justification for the unreasonably high insurance rates in Oklahoma,” Drummond wrote. “Conveniently, insurance companies are using Oklahoma weather as a red herring to distract from their profiteering tactics.”
Drummond concluded with a call for action that would offer relief to homeowners, and prescribed cooperation with existing bodies to find a way forward.
“I urge OID to collaborate with my office’s Consumer Protection Unit to combat rising insurance premiums plaguing Oklahoma consumers,” Drummond wrote.
