State Farm fails to meet subpoena deadline

Florida Insurance Commissioner (FIC) Kevin McCarty has postponed the public hearing to be held on Tuesday, Aug. 14 regarding recent underwriting decisions made by the State Farm companies conducting business in Florida. Subpoenas served on the companies for the upcoming hearing outlined the requirements for certain records to be produced for review by the Office of Insurance Regulation by close of business Wednesday, Aug. 8.

The response and information produced by the companies Wednesday was insufficient to meet the requirements set forth by the subpoenas. State Farm indicated more information would be forthcoming. The FIC office's legal staff is currently reviewing the matter to assure full compliance with the subpoenas and will be arranging another hearing date in the near future.

McCarty issued subpoenas in late July to State Farm Florida Insurance Company, State Farm Florida Fire and Casualty Insurance Company and State Farm Mutual Automobile Insurance Company, directing the three companies to appear at a public hearing in Tallahassee. The subpoenas served on State Farm require production of documents related to their recently filed non-renewal plans, multi-lines discounts, decision to withdraw from condominium business in Florida, and the impact these decisions may have on State Farm's rates.

Chris Neal, State Farm Public Affairs Manager for State Farm Florida Insurance, explains that "the commissioner informed us today (Friday, Aug. 10) that the hearing would be postponed. We did not have a lot of time, to produce a large volume of documents Wednesday and again today. Our legal department has been in constant contact with them for a solution."

Neal describes the documents as "broad in nature." He asserts that condo association changes were announced in May 2006, and "only 1,400 condo associations were underwritten at that time." The associations were non-renewed between Jan. 2007 and May 2007.

"An issue currently in litigation is a multi-line discount for auto insurance. Auto customers are discounted significantly if they also insure homes, and the state disapproved that. We are continuing to fight for that discount which we believe benefits our customers," Neal says.

The hearing will be open to the public, and input from interested parties will be welcomed.