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Florida insurance regulators subpoena State Farm policy data

Florida insurance regulators have subpoenaed State Farm for detailed information about its policyholders in the wake of the insurer's planned exodus from the state's property insurance market.

Florida Insurance Commissioner Kevin McCarty said he's seeking names, addresses, policy types, limits and premium data for each of State Farm's Florida policyholders. The request is part of a 90-day review of the company's withdrawal plan.

State Farm has until Feb. 9 to comply.

"We need to fully understand all the potential risks, so that we can properly evaluate State Farm's withdrawal plan," McCarty said Thursday. "Understanding how the company's statewide risk is spread will help us in working to find other companies that might be willing to write policies for current State Farm customers."

Ed Domansky, a spokesman for the Florida Office of Insurance Regulation, said numerous insurers have expressed interest in picking up discarded State Farm customers.

If private insurers don't assume a significant number of the 1.2 million policies being shed, hundreds of thousands of customers could flood into Citizens Property Insurance, the state-run insurer of last resort. That increases the burden for all Floridians if a major storm overwhelms Citizens' reserves.

Under state law, McCarty could reject State Farm's withdrawal plan if it's deemed "hazardous to policyholders or the public."

Gov. Charlie Crist endorsed the subpoena, saying he still thinks State Farm is not revealing its true financial picture. He didn't believe that State Farm's requested (and rejected) filing for a 47 percent average rate increase in homeowners insurance was justified. Nor does he believe the company's assertion that its Florida property insurance operation would go insolvent by 2011 without such a hefty rate increase.

"When you ask for a 50 percent rate increase, the gall of that is titanic to me," Crist said Thursday during a visit to St. Petersburg. "That is just not dealing with reality or compassion, or both."

On Tuesday, State Farm, the largest private property insurer in Florida, announced plans to drop coverage lines for house and condo owners, renters, personal liability, boats, personal articles and business property and liability. It will still write the more lucrative auto business and other lines such as life.

If the two-year withdrawal plan is approved, the first policies wouldn't be dropped until later this year.

However, the state is urging policyholders to be proactive in looking for coverage, steering them to the shopandcomparerates.com Web site as well as the Florida Market Assistance Plan site (www.fmap.org), which is designed to match consumers who cannot find property insurance with Florida licensed agents and insurers.

Some irate customers have threatened to pull their auto business from State Farm.

But Don Brown, immediate past president of the National Association of Insurance and Financial Advisors in Florida, urged them Thursday to think twice and think about their agent. A State Farm auto and homeowner customer for years, Brown said his initial reaction was to drop auto coverage. "But after reflecting, I said this was not my agent's fault," he said.

Florida insurance regulators subpoena State Farm policy data 01/29/09 [Last modified: Friday, January 30, 2009 7:09am]

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