Make us your home page
Instagram

Hurricane insurance hearings create own storm for State Farm

TALLAHASSEE — When State Farm officials appeared before Florida regulators Tuesday to seek a 47.1 percent statewide average rate hike, Office of Insurance Regulation general counsel Steve Parton zeroed in on why State Farm averaged the results of three hurricane models.

A key component of a company's rate need, the computer models estimate the dollar amount of losses from a storm.

Parton argued the models cannot be tinkered with, and State Farm was "taking three wrong answers and averaging them together to get a right answer."

"Aren't you now creating a fourth model?" Parton asked.

"I don't intend to be confrontational," answered Jeff McCarty, a State Farm vice president. "But each model is approved."

In a sometimes tense three-hour hearing, Florida's largest private home insurer said it needs the 47 percent rate hike to remain in business. State Farm's revenue has dropped 33 percent year to date, officials said, because of low premiums and a doubling of discounts it must give policyholders who harden their homes.

"The profit picture for State Farm Florida is nonexistent," said company president Jim Thompson.

But regulators questioned how State Farm could show huge losses even though it bought reinsurance from its parent company, is dropping 50,000 coastal policyholders, and stopped writing new policies in Florida.

"Enough is enough," said Gov. Charlie Crist. "I think he (Insurance Commissioner Kevin McCarty) will handle this case appropriately, and I think you know what I mean by that — rejecting it, the increase."

Parton said the hearing "certainly verified some our of suspicions" about how the company derives its numbers.

If regulators don't approve the hike, State Farm can refile or appeal to an administrative law judge. Or drop more policies.

But Thompson said the company has no plans to do that. "The plan is to get the 47.1 percent increase," he said, "and then consider our options."

Tom Zucco can be reached at zucco@sptimes.com or (727) 893-8247.

Hurricane insurance hearings create own storm for State Farm 08/12/08 [Last modified: Monday, August 18, 2008 11:47am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Legalized medical marijuana signed into law by Rick Scott

    State Roundup

    TALLAHASSEE — Gov. Rick Scott on Friday signed into law a broader medical marijuana system for the state, following through on a promise he made earlier this month.

    Gov. Rick Scott signed legislation on Friday that legalizes medical marijuana in Florida.
  2. Line of moms welcome Once Upon A Child to Carrollwood

    Business

    CARROLLWOOD — Strollers of all shapes and sizes are lined up in front of the store, and inside, there are racks of children's clothing in every color of the rainbow.

    At Once Upon A Child, you often as many baby strollers outside as you find baby furniture and accessories. It recently opened this location in Carrollwood. Photo by Danielle Hauser
  3. Pastries N Chaat brings North India cuisine to North Tampa

    Business

    TAMPA — Pastries N Chaat, a new restaurant offering Indian street food, opened this week near the University of South Florida.

    The menu at Pastries N Chaat includes a large variety of Biriyani, an entree owners say is beloved by millions. Photo courtesy of Pastries N Chaat.
  4. 'Garbage juice' seen as threat to drinking water in Florida Panhandle county

    Water

    To Waste Management, the nation's largest handler of garbage, the liquid that winds up at the bottom of a landfill is called "leachate," and it can safely be disposed of in a well that's 4,200 feet deep.

    Three samples that were displayed by Jackson County NAACP President Ronstance Pittman at a public meeting on Waste Management's deep well injection proposal. The sample on the left is full of leachate from the Jackson County landfill, the stuff that would be injected into the well. The sample on the right shows leachate after it's been treated at a wastewater treatment plant. The one in the middle is tap water.
  5. Honda denies covering up dangers of Takata air bags

    Autos

    With just a third of the defective Takata air bag inflators replaced nationwide, the corporate blame game of who will take responsibility — and pay — for the issue has shifted into another gear.

    Honda is denying covering up dangers of Takata air bags. | [Scott McIntyre, New York Times]