The Florida Office of Insurance Regulation (Office) has reached an agreement with State Farm Florida that will allow the insurer to remain a significant player in the Florida residential property insurance marketplace.
Florida Insurance Commissioner Kevin McCarty, who was recently elected vice president of the National Association of Insurance Commissioners (NAIC), issued a consent order that resolves the pending litigation between State Farm Florida and the Office over State Farm Florida's plan to leave the property insurance market.
"This agreement is the product of a long and arduous negotiation process," McCarty remarked. "The final result is beneficial to the people of the State of Florida, and beneficial to the Florida insurance marketplace."
Under the terms of the consent order, State Farm Florida will non-renew no more than 125,000 policies of its 810,416 residential property policies reported as of Oct. 2009. Even in light of these non-renewals, State Farm Florida will remain the largest private insurer of property insurance risk in the state. The order also grants State Farm Florida a 14.8-percent rate increase for all homeowners' and condo owners policies, which was based on information provided to the Office by State Farm Florida.
The consent order concludes a series of events that began with the Office's denial of State Farm Florida's ultimate average rate request of 67.1 percent. According to the Office, this signed order results in the retraction of State Farm Florida's withdrawal plan filed Jan. 27, 2009 and the cancellation of the Jan. 25, 2010 hearing before the Division of Administrative Hearings.
Source: www.floir.com.
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