TALLAHASSEE, Fla. (10/02/2007) - The Florida Office of Insurance Regulation (Office), in collaboration with the Office of the Attorney General (OAG), today announced that it has reached an agreement with State Farm Florida to reduce rates by an additional 2 percent for its Florida policyholders.
The additional 2 percent reduction comes on top of the 7 percent rate decrease State Farm implemented in the spring. The additional reduction will result in approximately $23 million in savings to their policyholders.
"State Farm has reduced its rates and has agreed to stop business practices that the Office found objectionable," said Insurance Commissioner Kevin McCarty. "Our governor and our legislature required this by law, so I am happy to see that State Farm has reached this agreement for the benefit of its policyholders."
In addition, State Farm has agreed to change its method for non-renewing policies in coastal zones in Florida. As was announced in July, the company still plans to non-renew up to 50,000 policies of policyholders with properties along the coast; however, non-renewals will not be based upon tying to other insurance products with the company.
State Farm also has agreed to refund excess surcharges. The excess amount, $23 million, plus 5 percent simple interest, will be refunded to State Farm policyholders beginning in six months.
As a result of a comprehensive investigation by the OAG, with the assistance of the Office, State Farm will begin a program of automatically notifying its auto policyholders that are eligible to transfer to the less-costly State Farm Mutual Company.
Further, State Farm will pay the Office $500,000, as reimbursement for the attorneys' fees and costs associated with the matters settled in the agreement. State Farm also will pay $1 million to the OAG, payable to the Department of Legal Affairs Trust Fund, as reimbursement for the attorneys' fees and costs associated with the agreement and to cover the OAG's costs of administering the fund and for use in continuing enforcement efforts.
And, State Farm has agreed to cooperate with the Office on further investigations related to potential collusion between insurers, trade associations and rating organizations.
This agreement takes the place of the required true-up filings; and as a result, the previously scheduled public hearings are canceled.
About the Florida Office of Insurance Regulation
The Florida Office of Insurance Regulation (Office) has primary responsibility for regulation, compliance and enforcement of statutes related to the business of insurance and the monitoring of industry markets. Business units within the Office are organized based on regulatory expertise and include the areas of life and health, property and casualty, specialty lines and other regulated insurance entities. It is within the Office that the mission of public protection is implemented through regulatory oversight of insurance company solvency, policy forms and rates, market conduct performance and new company entrants to the Florida market.
For more information about the Office, please visit
www.floir.com. If you would like to review and compare homeowners insurance rates in Florida, go to
www.shopandcomparerates.com.
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