Hearing Date Set On State Farm’s Plan To Leave Florida
July 16, 2009
State Farm Florida Insurance Co. lawyers on Wednesday urged an administrative law judge to speed up a tentative hearing schedule in its quest to exit the state’s property insurance market within the next two years.
Calling an Oct. 12 start date too late, the company urged Administrative Law Judge Suzanne Hood to bring parties to the table earlier for up to a week of testimony over the timetable and details of the company’s withdrawal plan submitted to state officials earlier this year.
“For the reasons stated in (State Farm’s) petition, including the ongoing erosion of State Farm Florida Insurance Company’s assets and the company’s projected insolvency by the end of 2011 if it is forced to continue to operate under current rate and risk conditions, petitioners believe that it is extremely urgent to resolve this dispute as quickly as possible,” company lawyers stated in their response to the judge’s order.
State Farm, the largest private property insurer in the state, is wrangling with state insurance regulators over a two-year withdrawal plan brought on by the company’s decision to leave the Florida market following its inability earlier this year to obtain what it perceived to be necessary rate hikes. The company asked for but was refused a 47 percent average increase.
The exit plan calls for State Farm to non-renew nearly 470,000 homeowners policies during the first of a two-year withdrawal plan under a proposed strategy submitted to a state hearing officer on Wednesday. The company must give customers at least 180 days notice of their pending cancellation.
Attorneys for State Farm and the State Office of Insurance Regulation met a Wednesday deadline to set hearing dates on the proposed plan, though the parties disagree over when to schedule the four or five day hearing, with company officials asking to have them earlier.
State Insurance lawyers, counter that the Oct. 12 date would be too soon, saying they won’t have enough time to adequately prepare for the court-like proceedings.
“Respondent respectfully believes that, since it appears that extensive discovery will be necessary, any time prior to the beginning of November is probably an inadequate time to prepare,” attorneys for the state contend.