Hearing on State Farm Florida Exit Plan Postponed Until January

A state administrative court hearing on State Farm Florida Insurance’s plan for withdrawing from Florida’s property insurance market that was set for Dec. 17 has been postponed again. At the request of officials for both the insurer and the Office of Insurance Regulation, it has been rescheduled to Jan. 25 before the Division of Administrative Hearings in Tallahassee.

There are indications, however, that it may never happen. The insurer and state have been in negotiations and could reach a settlement by then. The postponement allows them to focus on their negotiations rather than devote resources to discovery and other preparations that would be needed for the hearing.

Administrative Judge Susan Hood signed off on the rescheduling of the court date. It is the third delay she has granted.

State Farm announced in January that it wanted to withdraw from the state due to its inability to obtain approval for rate increases. The company submitted a withdrawal plan designed to trigger a two-year process of non-renewing its nearly one million policies in the state.

The OIR has balked at certain parts of State Farm’s plan including the insurer’s refusal to allow its agents to write policies for other insurers. OIR lawyers have also tried to limit the number of State Farm policies that end up in the state-backed insurer, Citizens Property Insurance.

State Farm has defended its plan as financially necessary. The administrative court was asked to settle the dispute.

Several weeks ago, Insurance Commissioner Kevin McCarty said he was hopeful that the parties would be able to reach a settlement and that the withdrawal could be avoided.

In August, McCarty gave State Farm approval to eliminate some of the home insurance discounts it had been offering — a change that effectively gave State Farm a premium increase of about 28 percent.

Topics Florida