Florida Denies State Farm Hearing on Withdrawal Plan
Florida Insurance Commissioner Kevin McCarty has denied State Farm Florida an administrative hearing on details of the insurer's plan to withdraw from the state's homeowners market.
State Farm Florida has balked at requirements McCarty has attached to its withdrawal including one that it let its agents place homeowners policies with other insurance carriers.
The company and McCarty have been at odds over how to handle the more than 1 million Florida property insurance policies State Farm Florida plans to stop writing. The company is not exiting the auto insurance business.
Among other things, State Farm's plan calls for it to be able to transfer as many as 470,000 policies in the first year to Citizens, something McCarty wants to keep from happening.
In its hearing petition and its withdrawal plan, State Farm Florida has argued that it must withdraw from the market to avoid insolvency by 2011.
In denying the petition for a hearing, McCarty said State Farm Florida failed to explain how the withdrawal plan with the requirements he wants would harm it financially. He claimed that the requirements should actually help State Farm Florida because they accelerate the withdrawal more than the insurer's original proposal.
McCarty gave State Farm Florida until April 14 to file an amended request for a hearing.
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