NU Online News Service, Dec. 20 1:39 p.m.EST
|State Farm Lloyds in Texas is asking an appellate court torethink an order requiring it to refund $310 million in premiums topolicyholders.
|In April a Texas judge upheld an order against State Farm to refund $310 million, plusinterest, to policyholders for alleged excessive rates from as farback as 2003.
|Insurance Commissioner Mike Geeslin issued the order in November2009. The insurer and the regulator have been battling in courtever since.
|State Farm has compared the penalty to the cost it suffered fromHurricane Ike in 2008.
|The insurer says it is looking to make sure it can fulfill thepromises it makes to Texas policyholders and it is appealing theruling because "the ruling could harm State Farm's ability to dothat."
|"We believe the ruling is not supported by the evidence, and iscontrary to Texas and federal law," says company spokesman KevinDavis, adding that the fact consumers continue to choose State Farmis evidence the insurer's rates are competitive.
|The history of this dispute goes back about seven years, whenTexas regulators ordered State Farm to reduce its rates. State Farmfought the order and won in district court but the Department ofInsurance appealed and the matter was sent back to the departmentfor review and reexamination.
|Late in 2009, Geeslin issued his refund order to State Farm.
|The insurer, the largest personal-lines insurer in the state,says the order "not only challenges State Farm financially, itcreates an unstable environment for consumers and the insuranceindustry."
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