State Farm Florida Gives Policyholder Information to Regulators

State Farm Florida is thought to have complied with a request from the Florida Office of Insurance Regulation for information about policyholders to prepare for the company's withdrawal from the property insurance market.

State Farm spokesman Chris Neal and OIR spokesman Ed Domansky confirmed the insurer had submitted documents to the OIR the afternoon of Feb. 9, before a deadline for the insurer to comply with a subpoena Florida Insurance Commissioner Kevin McCarty gave State Farm Florida days after the company said it would leave Florida by the end of 2011.

McCarty sought the names, addresses, policy types, policy limits and premium information for each of State Farm Florida's policyholders (BestWire, Jan. 30, 2009).

Domansky said attorneys will review the documents to make sure all information requested has been submitted. Regulators have 90 days to approve State Farm's withdrawal plan from the date it was announced on Jan. 27.

State Farm plans not to renew the last of its 1.2 million property insurance policies during the fourth quarter of 2011. The insurers withdrawal plans were submitted weeks after McCarty issued a final order denying a 47% average statewide rate increase State Farm first filed in July 2008 (BestWire, Jan. 12, 2009).

Following the decision, the company warned of a "deteriorating" financial condition in Florida, noting in a statement that over the past 12 months, State Farm Florida's surplus as declined from $820 million to $621 million, despite not suffering any major catastrophes in the past year. According to State Farm, since the year 2000, its Florida unit has had a combined ratio of 121, and suffered a $1.2 billion underwriting loss this decade. The company said that under current conditions, it would be insolvent by 2011 (BestWire, Jan. 27, 2009).

State Farm Florida Insurance Co. currently has a Best's Financial Strength Rating of B+ (Good).

In 2007, the top five writers of homeowners multiperil in Florida, according to A.M. Best Co. state/line product information based on direct premiums written, were: State Farm Group, with a 21.3% market share; Citizens Property Insurance Corp., with 20.5%; Universal P&C Insurance Co., with 6.1%; USAA Group, with 5.2%; and Tower Hill Group, with 4.4%.

(By Chad Hemenway, associate editor, BestWeek: [email protected])