Posted on 27 Jan 2009
State Farm, Florida's largest private homeowners insurer, is planning to stop selling property insurance in the state.
State Farm spokesman Chris Neal said Tuesday that some 1.2 million customers with residential and other related property insurance policies would be affected, but said that none need to worry immediately.
"It's going to be a long process," Neal said. "No one has to do anything today."
The Illinois-based insurer can't do anything either before completing a regulatory review in 90 days, and is then prohibited by law from ending any policy before giving a six-month notice.
Four State Farm executives, including chief executive officer Ed Rust and State Farm Florida President Jim Thompson, met with Insurance Commissioner Kevin McCarty and other staff at the Office of Insurance Regulation for an hour Tuesday to inform them of their decision.
McCarty called the State Farm decision disappointing but not surprising.
"I will do everything within my power to protect Florida consumers from unnecessary destabilization of the insurance market," McCarty said. "Florida already has new companies who are eagerly looking to grow their businesses and will welcome the opportunity to add more customers."
Neal said State Farm's 2.8 million auto customers and those with life and health insurance policies in the state are not affected by the company's decision.
State Farm Florida was established in 1998 as a subsidiary of State Farm Mutual Automobile Insurance Company.
In its statement Tuesday, the insurer said it has been unable to obtain regulatory approval from Florida officials to charge adequate rates for its property insurance for homeowners, renters and others who own condominiums, boats and businesses.