Home $weet Home for State Farm Florida

Anyone surprised to learn State Farm Florida will be staying in the State?  h/t Chip Merlin’s Property Insurance Coverage Blog for the link to the official press release:
The Florida Office of Insurance Regulation (Office) today announced that Commissioner Kevin McCarty has issued a Consent Order that resolves the pending litigation between State Farm Florida and the Office over State Farm Florida’s plan to leave the property insurance market.  By the terms of the Consent Order, State Farm Florida will remain a significant player in the Florida residential property insurance marketplace.
“This agreement is the product of a long and arduous negotiation process,” remarked Commissioner McCarty. “The final result is beneficial to the people of the State of Florida, and beneficial to the Florida insurance marketplace. The consent order satisfies the Office’s requirements issued in our Order dated Feb. 13, 2009, and allows State Farm Florida to remain a viable insurer in the Florida market.”
Under the terms of the Consent Order, State Farm Florida will non-renew no more than 125,000 policies of its 810,416 residential property policies reported as of Oct. 2009. Even after these non-renewals, State Farm Florida will remain the largest private insurer of property insurance risk in the state of Florida. The Consent Order also grants State Farm Florida a 14.8 percent rate increase for all homeowners’ and condominium unit owners policies, which was based on information provided to the Office by State Farm Florida. (emphasis added)
The consent order concludes a series of events that began with the Office’s denial of State Farm Florida’s ultimate average rate request of 67.1 percent. The Consent Order signed today results in the withdrawal of State Farm Florida’s withdrawal plan filed Jan. 27, 2009 and the cancellation of the Jan. 25, 2010 hearing before the Division of Administrative Hearings.
Time will tell if there is a devil in the details as the Consent Order is implemented.

2 thoughts on “Home $weet Home for State Farm Florida”

  1. Not surprising at all. Readers who have followed this story on “Slabbed” remember Sop advised to buy up lots of popcorn as this unfolded. I agreed with him and suggested there were many conversations being held behind closed doors.

    The Gov is running for the Senate and not doing as well as he expected. I suggests it is because of the way he has bungled the insurance market in FL. He said it was no problem if SF left. He found that was not the case. Were there other carriers? Yes, but they were not as solvent as SF and charging rates higher than SF wanted to charge. He and Mr. Mc Carty miscalculated the situation.

    It is good SF is staying as FL is still an insurance disaster, it just hasn’t been declared yet. This story is not over.

  2. Interesting perspective Sup. I don’t quite see it the same way. You may remember State Farm went to McCarty with something on order of a 67% rate up with a take it or we’ll be leaving ultimatum. He looked at the rate filing and denied it, State Farm appealed to a Florida “administrative” judge that ultimately found the filing included “sham” inter-company transactions that essentially served no purpose except to pump the bogus rate filing. State Farm announced they were leaving and McCarty immediately began lining up private market capacity to fill the void which he did according to press accounts. It was there our coverage ceased due to time constraints.

    Chip Merlin never stopped covering the matter on his blog though so I kept up. State Farm went after McCarty legislatively and almost suceeded. It was only after theyfigured out that McCarty could not be steamrolled that they finally decided to act like a responsible corporate citizen instead of a bully. Evidently they came clean and provided him justification for the rate up they got. The cancellations aren’t a big deal either IMHO as McCarty had all of the Farm’s business Farmed out anyway when they said they were leaving. In fact given State Farm’s terrible reputation as a bad faith insurer I’ll go further and say those people who will be cancelled are being done a favor.

    As for Crist he cuddled up with Obama and now pays the price in his base. The insurance guys are the only ones that blamed him for State Farm’s BS. His stance on State Farm no doubt derived from the fact he is accountable to the voters unlike State Farm whose behavior indicates they believe they are accountable to no one.

    sop

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