The Florida Office of Insurance Regulation announced Wednesday that it had reached agreement with State Farm Florida and the insurance giant would no longer be leaving the State.
According to a statement on State Farm Florida’s website, “the settlement reached is an important one which will help State Farm Florida stabilize its financial condition by allowing the Company to reduce its exposure to catastrophes and increase rates”, its President Jim Thompson said.
“This agreement is the product of a long and arduous negotiation process,” remarked Commissioner McCarty of the Florida Office Insurance Regulation. “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 agreement, State Farm Florida will non-renew no more than 125,000 policies of its 810,000 residential property policies reported as of October 2009. The agreement also allows for an average increase of 14.8 percent on homeowners and condominium unit policy holders. For those policies that will not be renewed, owners will have at least six months of advance notice.
Even after these non-renewals of policies, State Farm Florida will remain the largest private insurer of property insurance risk in the State of Florida.
The agreement concludes a series of denials by the Office of Insurance Regulation of State Farm Florida’s requests for rate increases which averaged 67.1 percent. It also results in the withdrawal of State Farm Florida’s plan to leave the State.
Governor Charlie Crist, some ten months ago had notably said “good riddance” when State Farm had announced its plans to leave. Today, however, the Governor praised McCarty for “great work”, following the announcement.
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