RMS says that new methodology is needed in order to predict storm damage accurately while critics say RMS rushed an untested product to the market. By doing this, the coastal insurance markets would be destabilized.

Insurance Commissioner Jim Donelon was surprised to learn that his actuarial staff had accepted the RMS model for use in Louisiana and that its projections had already started influencing filings from several major insurance groups including the Hartford Financial Services Group and American National Property and Casualty Cos.

Luckily, Mr. Donelon ordered that any increases that had not already taken effect be postponed until a review by the Florida Commission on Hurricane Loss Projection Methodology is completed. This commission is considered to be one of the most qualified public bodies in the nation.

RMS has decided to pull their model rather than risk it being rejected. By doing this RMS has been able to submit the latest edition of its conventional hurricane model to the commission for approval.

The Louisiana Department of Insurance now needs to figure out how to handle the companies that have used the model in their rate filings. The rate increases will probably be able to stand because the flex-band system allows companies to make changes of less than 10 percent without coming before them and the statewide average increase has been 9.9 percent. The companies could have justified up to an 18 percent increase by using the RMS model but would have had to appear before the rating commission before doing so.