Missouri Jury Tells State Farm to Pay Up

A Kansas City jury recently had some bad news for one of the nation’s top insurers in deliberations that reportedly took less than six hours. The message to State Farm–pay up.

Five former State Farm Ins-urance agents were awarded $20 million by the jury that decided the agents were improperly terminated for being critical of the way the insurer reportedly treated its policyholders.

Tana Glockner, Joseph J. Kelly, Clifford F. Lykke, Michael Lee Morgan and Lee P. Saghirian, whose contracts were terminated in January 2000, were awarded $9 million in actual damages and $11 million in punitive damages. The five, who reportedly had more than 100 years of collective experience with State Farm, had spoken out in the fall of 1999 against the company, saying there was a need for change in State Farm’s management structure.

In late 1999, the five agents gave permission to use their names in a letter to the Texas insurance commissioner that was critical of State Farm’s treatment of policyholders.

Among the allegations were that the insurer charged extra for homeowners insurance, tried to defraud accident victims from full compensation and permitted sales discrimination to occur at the company. Glockner and Morgan had already given permission for their names to be signed to a letter to the Senate Commerce Committee and had participated in a Washington news conference.

A lawyer for the plaintiffs noted that at the heart of the Missouri case, was determining whether the insurer could fire an agent for going public to protect policyholder interests. He added that during the mid-1990s, there were a number of verdicts and settlements in which the insurer was discovered to have treated policyholders unfairly in a variety of different ways.

State Farm Director of External Relations, Phil Supple, told Insurance Journal that the company was obviously disappointed with the jury’s decision. “We believe our actions were appropriate, and we do not believe the verdict is supported by the evidence presented at trial,” Supple said. “We will reflect on the verdict and explore our options.”