Florida Attorney General, Office of Insurance Regulation Reach $46 Million State Farm Settlement

October 2, 2007 -- TALLAHASSEE, FL – Florida Attorney General Bill McCollum today announced that the Attorney General’s Office and the Office of Insurance Regulation have reached a $46 million settlement with State Farm Mutual Automobile Insurance Company and State Farm Fire and Casualty Company, collectively owned by State Farm Insurance. Under the settlement, State Farm will refund excess surcharges amounting to approximately $23 million, plus five percent simple interest, to State Farm policyholders beginning in six months. State Farm will also implement rate changes that will reduce homeowner rates by a statewide average of two percent, saving policyholders another collective $23 million.

“The insurance industry must take responsibility for ensuring policyholders are treated fairly,” said Attorney General McCollum. “This settlement helps achieve that.”

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Among other issues, the settlement resolves an investigation involving the companies’ failure to automatically notify eligible auto policyholders that they can transfer from more expensive policies with one company to lower-cost policies in the other company. Authorities believe there are approximately 200,000 Florida policyholders with State Farm Fire and Casualty Company. By moving eligible customers to State Farm Mutual Automobile Insurance Company, State Farm estimates 35,000 people will save $100 – $200 per year.

The Attorney General’s Office and the Office of Insurance Regulation will receive $1.5 million from State Farm for reimbursement of attorney fees and costs in connection with their joint investigation of the case.

Source: Florida Attorney General