2/5/09 Updates on the State Farm Announcement in FL

January 09 has certainly had interesting moves in the ongoing  “Who Moved my Claims Cheese” we’d blogged about here.

 Flexibility for independent adjusting firms and independents is even more important today with the State Farm announcement as well as with the December 08 announcement by Citizens on independent adjusting firms selected to handle their claims (supplementing their own staff adjusters).

In the early part of January 2009, Attorney Chip Merlin who is the Consumer Advocate member of the newest Citizens Task Force Mission posted articles about upcoming meetings where recommendations were being made to return Citizens FL back to the insurer of last resort it was initially intended to be. Approximately 3 weeks later, BOOM, the big announcement that State Farm would be leaving the FL homeowners market over a dispute on their request for a 47% rate increase after their request was denied.

We’ve been following the news updates and the struggles policyholders are having locating new coverage. There is also alot of news from other points of view to include more from Chip Merlin’s blog and news from the carrier themselves, news from the Polk County Board where the FL HQ for the carrier is, and much more. The most surprising was the request this week from Alex Sink with the FL Department of Financial services that the carrier let their captive agents place these 1.2 million policies with other private insurers. The carrier rejected the request according to some of the following linked news sources.

To read about all of these new developments post State Farm release here are a few samples of these articles and blogs discussing these hot topics:
http://blogs.orlandosentinel.com/news_columnist_mikethomas/2009/02/how-charlie-crist-shot-himself-in-the-foot-on-state-farm.html

This one discusses the unprofessional  comments Gov Crist made about the company departure and the higher rates folks are finding trying to find other coverage:

Here’s another blog with even more entries from policyholders trying to find new coverage:

http://blogs.orlandosentinel.com/news_columnist_mikethomas/2009/02/state-farm-exoduswhere-to-go.html

Wall St Journal article carrying the quote Crist made about them leaving and also comments that he is trying to prevent them from cancelling more than 2% of their policies in a single year:

http://online.wsj.com/article/SB123371173559046209.html

Will the carrier’s move cost them loss of many autos as well?

http://blogs.orlandosentinel.com/news_columnist_mikethomas/2009/02/state-farms-huge-gamble-dump-my-house-lose-my-car.html

Polk County Board to write Crist since SF Regional office is in their county. Article quotes possible impact on 300 employees there (my guess underwriting and claims in the HO area):

http://www.newschief.com/article/20090205/NEWS/902050323/1022/LIVING?Title=Polk_board_writes_to_Crist_about_State_Farm

This next article contains great marketing info for adjusting firms about what other FL carriers are saying about how many policies that they can assume of  State Farm’s.
http://www.orlandosentinel.com/business/orl-statefarm0509feb05,0,4365661.story

In this next article they discuss the impact this may have forcing insureds into Citizens as well as asking a question if this is a chicken game between the carrier and Crist:

http://www.orlandosentinel.com/orl-miket0509feb05,0,5259638.column

This article says Alex Sink- Dept of Ins is trying to talk SF into letting it’s captive agents write for private insurers and contains another list and more info on carriers wanting to take over the policies as well as quoting Citizens of FL saying they do have capacity to take all 1.2 million policies if need be (my insert here…..what happened to the new Citizens task force that is studying the return of Citizens to an insurer of last resort!):*Note I have another link where SF is quoted saying this is not going to happen letting their agents write for private insurers although they can write for Citizens)

http://www.miamiherald.com/business/story/886725.html

This is the link with the info about Sink”s letter to SF’s Jim Thompson and says right now their agents can only write for SF and Citizens:

http://www.orlandosentinel.com/business/orl-statefarm0409feb04,0,3775835.story

Here is an article saying SF will NOT let it’s agents write through the private carriers:

http://www2.tbo.com/content/2009/feb/03/plenty-insurance-companies-want-state-farms-polici/news-politics/

Here are updated comments where SF says they haven’t given up on getting the 47% rate increase but it was not a ploy announcing it was leaving the FL market but sounds like they are considering an APPEAL on the rate decision:

http://www.jacksonville.com/news/florida/2009-02-03/story/state_farm_hasnt_given_up_on_47_percent_rate_increase

The above linked article is very interesting since major plaintiff attorney Chip Merlin recently posted several blogs on State Farm’s planned departure questioning if it was Propoganda:

This first blog discusses suggested “sham economics” between funds from the FL branch and corporate HQ:

http://www.propertyinsurancecoveragelaw.com/2009/02/articles/state-farm/state-farms-freakoutnomics/

Here is the one on Power/Propoganda Play questions:

http://www.propertyinsurancecoveragelaw.com/2009/01/articles/insurance/state-farms-power-play-and-propaganda-ploy/

I know this is alot of information to digest but they cover many of the base questions we all have about how this decision will effect us as residents of FL as well as independent adjuster opportunities.

In case your thinking well they will all just be moved to Citizens still…read these two additional entries from Attorney Chip Merlin about an upcoming Task Force meeting about returning Citizens back to an insurer of last resort. These were written at the beginning of January. He is the consumer representative on this Task Force:

http://www.miamiherald.com/business/story/838975.html

http://www.sun-sentinel.com/business/sfl-flzcitizens0104sbjan04,0,5619118.story

Where does this leave adjusting firms? Where does this leave independent adjusters? As there is two years State Farm indicates to get this worked out this will be major for independent adjusters servicing State Farm catastrophe losses as well as the vendors selected in Citizens latest RFP. It is interesting to note that Citizens FL had just approved the selection of 30 vendors and rejected 28 of them in a December 12, 2008 and many of those firms rejected had experience servicing their claims. More on that in the next blog…….

 

 

 

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