Florida regulators are calling on three State Farm subsidiaries to clarify the company's plans to reduce its risk in the state, issuing subpoenas to appear at a public hearing next week.
In announcing the subpoenas today, which were issued late last month to the company, the Florida Office of Insurance Regulation cited recently filed nonrenewal plans, multilines discounts, the company's decision to withdraw from condominium business and the impact these decisions may have on rates.
Jonathan Kees, a spokesman for the state's insurance office, said the subpoenas were issued over concerns that the language in the nonrenewal rules filed by State Farm was "vague and ambiguous," and that regulators want to discuss the potential impact of that language on the carrier's rates in the state.
Companies file their rates in Florida, and it is up to regulators to determine if those rates are commensurate with the risk, Mr. Kees noted.
"If State Farm were to nonrenew a large portion of their risk" with a focus on high-risk policies, then their rating should reflect that change, he said. "We have to make sure that the rates aren't excessive."
In addition, he said, the department has seen reports claiming that as many as 50,000 policies could be affected by State Farm's decision, and would like to see how close to the mark those reports are.
"We would like to know those details," he said.
Phil Supple, a spokesman for State Farm, said the company "plans to cooperate fully" with Florida regulators and is already "preparing the documents and testimony that we expect them to ask about."
The hearing, which is open to the public, is scheduled for 9:30 a.m. on Aug. 14 in the state Senate Office Building in Tallahassee.
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