Newspaper article The Florida Times Union

Insurer Considers Appeal of Rate Denial; State Farm's Exit from Florida Not a Ploy, Executives Say

Newspaper article The Florida Times Union

Insurer Considers Appeal of Rate Denial; State Farm's Exit from Florida Not a Ploy, Executives Say

Article excerpt

Byline: BRANDON LARRABEE

TALLAHASSEE - State Farm might continue pushing for a 47 percent rate increase for its property insurance customers in Florida even as it makes plans to leave the state, executives told lawmakers Tuesday.

The company is considering taking its case to the appeal courts, said David Hill, vice president of State Farm Mutual of Illinois, the Florida affiliate's parent company, though he conceded the chances of success were slim.

But the company's announcement that it was leaving the state was not an attempt to force its rate increase through, Hill said. And he declined several times to say whether any action the state could take would persuade State Farm Florida to change its mind.

"The filing of this plan is in no way a ploy," Hill said at a meeting of the House Insurance, Business and Financial Affairs Policy Committee. "Given the financial condition of this company, there's simply no way we could say, 'Hey if this would happen, we could reverse course.'"

The company doesn't plan to pursue additional rate increases before it leaves Florida, Hill said, but he added that a major hurricane could change that.

Regulators' rejection recently of the 47 percent rate increase was just the latest in a series of actions that made it almost impossible to stay in business in Florida, Hill and State Farm Florida President Jim Thompson said. State-mandated discounts for customers who work to protect their homes from wind damage and a required 9 percent premium reduction in 2007 also hurt the company's ability to store up enough money to pay claims if a major storm were to strike.

The company plans to pull out over a two-year period, with each of its 1.2 million policy holders getting at least six months' notice before his or her policy is canceled. State Farm Mutual will continue to offer auto, life and health insurance in Florida. …

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