‘Main Street’ P/C Insurers Tell Congress They Don’t Need More Regulation

September 23, 2009

  • September 23, 2009 at 9:39 am
    people who had to fight says:
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    WE IS THE CONUSUMER.

    There is no need for a federal consumer protection agency .;Insurance regulators and insurers told Congress.; Bull just ask the poor people who had to fight STATE FARM.. CONGRESS NEED TO WORK FOR THE CONUSUMER… NOT THE INS AGENCY

  • September 23, 2009 at 9:42 am
    CONGRESS NEED TO WORK FOR says:
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    BILOXI, Miss. (MCT) — In some cases, State Farm’s top leadership prefers not to share or even keep records that offer insight into how policyholder claims are handled, according to court records.

    Chairman and CEO Edward B. Rust Jr. said in sworn testimony earlier this month that no minutes are kept of quarterly meetings held by the company’s top management, the Chairman’s Council, and that policyholders have no right to information about an investigation State Farm Insurance Cos. has ordered of its relationship with Haag Engineering Co.

    State Farm spokesman Phil Supple said the company doesn’t “intend to-;try this-;case in the media.”

    “State Farm stands by testimony given by President and Vice Chairman Vince Trosino, who said when asked about these allegations, ‘It’s not part of our system. It’s not part of our core values. It’s not what made us the most successful property and casualty insurer, life insurer, in the country.'”

    Juries in two states, Texas and Oklahoma, have found Haag provided biased reports to State Farm to minimize or deny policyholder claims. Mississippi’s attorney general currently is conducting a grand jury investigation to determine whether State Farm and other insurers denied Hurricane Katrina claims through the use of fraudulent engineering reports.

    Haag denies bias, but State Farm suspended business with the company in June and ordered an independent investigation after an Oklahoma jury awarded a total of $13 million to a policyholder over tornado damages. Subsequent trials are set to determine damages for 70 other policyholders, all of whom had claims investigated by Haag.

    In past court cases, judges have chastised and even fined State Farm for withholding records the company was ordered to produce. Evidence the company destroyed documents has been presented in several cases.

    In the Oklahoma case, after State Farm finally turned over to the court a “claims legal research” DVD and other records, Judge Richard G. Van Dyck told company attorneys

    “As I was watching these tapes I just want to say this for the record, the hair on the back of my neck did — did stand up because I was seeing things there that early on in this case I was told by (State Farm) defense counsel didn’t exist and couldn’t be produced. So I’m not real happy with that and I want to remind all counsel that their ethical responsibilities as attorneys outweigh the wishes of their clients.”

    Gary T. Fye, an expert in the analysis of disputed insurance claims who lives in Nevada, often testifies in insurance cases. Fye, who said he has testified on behalf of policyholders and insurance companies, has provided the courts information on State Farm’s history of destroying and withholding records.

    In 1998, Fye wrote in a Florida case

    “I have been witnessing document destruction, concealment, and obstruction of discovery by State Farm for many years in connection with my review of internal claim practices documents of the insurer. I have accumulated certain Exhibits which show the company’s goals and objectives for document handling by its employees. The documents show close to 28 years of intentional destruction, concealment and distortion of claim practices records.”

    In some cases, company executives did not keep records.

    Jeff Marr, the attorney suing State Farm in Oklahoma, took sworn testimony Sept. 6 from Rust. Topics included Rust’s Chairman’s Council, made up of top State Farm executives. The group, which includes the company’s general counsel, meets quarterly.

    Marr was fishing for records of those meetings that he could subpoena for his lawsuit.

    “Certainly,” Marr asked Rust, “you keep records of the quarterly meetings where the entire Chairman’s Council is present?”

    “We have an agenda,” Rust said, “but minutes in that, no.”

    “Why not?” Marr asked.

    Rust replied, “Never felt a need to.”

    Marr later asked, “Are there any written agendas that are available should I choose to request them in the lawsuit?”

    “I’m not sure what might be available,” Rust said.

    Rust also said policyholders, who essentially own the private mutual company, are not entitled to know what the Chairman’s Council discusses or decides about litigation against State Farm, citing attorney-client privilege.

    Marr questioned why the company would withhold information from policyholders, who own State Farm.

    “Well, again,” said Rust (who has a law degree), “I’m not an expert in the area, but I think as you find — even if I’m a shareholder in a publicly traded company, there are things that are not — you know, I do not have access to.”

    Marr later asked if policyholders have a right to see documents from State Farm’s investigation of Haag.

    “No,” Rust said.

    “Why not?” Marr asked. “Is it privileged?”

    Rust said, “I believe so.”

    (c) 2006, The Sun Herald (Biloxi, Miss.).

    IS THIS FUNNY nobody important?

  • September 23, 2009 at 9:44 am
    that their ethical responsibil says:
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    Juries in two states, Texas and Oklahoma, have found Haag provided biased reports to State Farm to minimize or deny policyholder claims. Mississippi’s attorney general currently is conducting a grand jury investigation to determine whether State Farm and other insurers denied Hurricane Katrina claims through the use of fraudulent engineering reports.

    Haag denies bias, but State Farm suspended business with the company in June and ordered an independent investigation after an Oklahoma jury awarded a total of $13 million to a policyholder over tornado damages. Subsequent trials are set to determine damages for 70 other policyholders, all of whom had claims investigated by Haag.

    In past court cases, judges have chastised and even fined State Farm for withholding records the company was ordered to produce. Evidence the company destroyed documents has been presented in several cases.

    In the Oklahoma case, after State Farm finally turned over to the court a “claims legal research” DVD and other records, Judge Richard G. Van Dyck told company attorneys

    “As I was watching these tapes I just want to say this for the record, the hair on the back of my neck did — did stand up because I was seeing things there that early on in this case I was told by (State Farm) defense counsel didn’t exist and couldn’t be produced. So I’m not real happy with that and I want to remind all counsel that their ethical responsibilities as attorneys outweigh the wishes of their clients.”

  • September 23, 2009 at 9:47 am
    claims legal research says:
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    In the Oklahoma case, after State Farm finally turned over to the court a “claims legal research” DVD and other records, Judge Richard G. Van Dyck told company attorneys

    Tell Congress TO FIND THE DVD AND SHOW IT ON C-SPAN

  • September 23, 2009 at 10:02 am
    the court records say. says:
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    Katrina Victims Hit Corps of Engineers with Nearly 500K Claims
    Texas / South Central News • January 10, 2008
    Hurricane Katrina’s victims have put a price tag on their suffering and it is staggering – including one plaintiff seeking the unlikely sum of $3 quadrillion. Insurance companies are among the …
    Back to article
    Insurance Journal is not responsible for the content of the message below.

    Subject: RE: RE: They Deserve Every Penny
    Posted On: January 11, 2008, 11:57 am CST
    Posted By:
    Comment:
    The owner of an engineering firm hoped to make up to $1.5 million over three months by adjusting Hurricane Katrina claims for State Farm, borrowing $150,000 and establishing a line of credit with State Farm Bank to set up shop on the Mississippi Coast in September 2005, according to records filed late Tuesday in federal court.

    Because of the arrangement, Forensic Analysis & Engineering Corp. was beholden to State Farm, which wanted to minimize its Hurricane Katrina losses for wind damage, the lawsuit says. Another vendor that adjusted Katrina claims, the independent adjusting firm E.A. Renfroe & Co. Inc., at times owed 80 percent of its income to State Farm, the court records say.

  • September 23, 2009 at 12:46 pm
    broke says:
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    The federal government needs to take over the P/C industry as well as the health insurance industry. Americans have a right to affordable auto and homeowners insurance no matter where they live and what their driving record or insurance score is. It is not fair that poor people with bad driving records pay more for the same auto insurance. It is also not fair that if you live near the coast you have to pay unaffordable property insurance. There is too much fraud and waste which could be cut with a single payer system.

  • September 23, 2009 at 1:04 am
    The Joker says:
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    broke,

    You’re kidding right? Your comment can’t be real. You actually believe that a monopoly on insurance is beneficial? So why not have a monopoly on every other good and service? Why stop at insurance if a government insurance monopoly will bring us utopia?

    You’ve drunk too much government Kool-Aid. Get out in the free market and learn how the world works.

    P.S. I hope the joke is on me and that your comment was a sham.

  • September 23, 2009 at 1:15 am
    True American says:
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    I am totally agreeing with The Joker! The comment by broke has to be a joke!! (and we thought The Joker was the one with all the tricks to make us laugh!!)

  • September 23, 2009 at 1:19 am
    ed b says:
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    Broke: so it is your opinion that good drivers should pay the same as folks that speed, drink and drive? if you have 100 people that pay 50 dollars a month, and 1 of these people, lets say you for example, crashes into some one and causes 7,000 worth of damage to your car and the other persons car and you both have 2,500 in medical bills 2 things will occur 1. the insurance company is now broke and 100 people do not have coverage anymore 2 you are now paying more than 50.00 a month in lawsuits. while this is simplified to an extreme the principal is still there. people who drive good or live in less risky areas Should pay less than those that drive bad or live in high risk environments. I would also like to say that POOR is an attitude not a financial status- Broke is a financial status

  • September 23, 2009 at 1:28 am
    Optimist says:
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    People, please. Broke’s comments are dripping with sarcasm. Everyone on this site gets so worked up about anything to do with government, I’m surprised you haven’t all had a heart attack or stroke by now…

  • September 23, 2009 at 1:38 am
    Buckeye says:
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    Thanks, broke, for a LOL moment, especially considering that a few people actually thought there might be some seriousness to your comments.

  • September 23, 2009 at 1:48 am
    Brokette says:
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    Oh, I agree with broke. I can’t WAIT until our California Earthquake rates have to be subsidized by folks in the East and Midwest. Makes perfect sense to me.

  • September 23, 2009 at 1:56 am
    Buckeye says:
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    As a Midwesterner, let me be the first to step up and offer any financial assistance you so desire. Let me know if you need any help with fires and/or mud slides. Glad to help!

  • September 23, 2009 at 2:16 am
    ed b says:
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    I did not mean to sound like I was over reacting I just thought that Broke was from the south eastern region of this fine country and wanted to help out a little!

  • September 23, 2009 at 2:43 am
    matt says:
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    YOU LIE!!! Our reform must not pay for auto coverage for illegal aliens! They took our jobs! (in a southpark “dey terk eour jawbs” accent)

  • September 23, 2009 at 2:46 am
    North-South-East+West says:
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    broke should be careful not to choke, having so much tongue in his/her cheek.

    Problem is our wonderful governement staff will read this comment and believe it, hook, line and sinker…

    I don’t think the earlier responses were necessarily believing “broke” was serious so much as wanting to dispel any possibility others would actually believe such drivel.

  • September 23, 2009 at 2:54 am
    Speaker pelosi says:
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    I agree anyone who lives in the country should pay the same. as I see it there are only two types of people in this country, those who work and those who dont. it is only common sense for those that work to pay for those that dont, look at the california budget there is a reason why we are doing so well!

  • September 24, 2009 at 10:36 am
    The Joker is correct! says:
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    Monopoly! The Insurance Industry is controlled by the “White male Republican” that when given the opportunity will “Red Line” and insure only those parts they feel is profitable. Red Lining is well and alive! I can tell that most of you placing comments are new to this industry and naive. Have you ever heard of no-fault insurance? You should not be surprised because many States already have it. Look into it because it is a form of government intervention and it should be used in all states. Good job Broke but the only exception I have is that it does not affect the poor only but everyone. Get smart Broke because you are in the right track!

  • September 25, 2009 at 12:13 pm
    LET'S UNSEAL ALL COURT RECORDS says:
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    WE ALL GET HOW THIS CORPORATE GREED WORKS! YOU TAKE THE MONEY AND YOU PAY YOUR CEOS BIG WAGES AND YOU CANCEL POLICIES. YOU DON’T PAY CLAIMS, YOU DESTROY RECORDS SO YOU DO NOT HAVE TO PAY PEOPLE, AND THEN YOU HAVE THE GALL TO ASK FOR AN INCREASE OR YOU WILL LEAVE THE STATE. YOU CAN FOOL SOME OF THE PEOPLE SOME OF THE TIME, BUT NOT ALL OF THE PEOPLE THAT KNOW YOUR TRICKS AND YOUR MANNERS. I HAVE GIVEN YOU STORIES THAT ARE REFLECTIVE OF COURT DOCUMENTS THAT PROVE WHAT A TRAVESTY THE INSURANCE COMPANIES HAVE BECOME AND ALL YOU CAN DO IS RIDICULE WITH YOUR NARROW MINDS. I DON’T WANT THE GOVERNMENT IN THE INSURANCE BUSINESS. WHAT I WANT IS CIVIL PANELS MADE UP OF CITIZENS THAT ARE AS SICK AND TIRED OF THE INSURANCE COMPANIES INJUSTICE AS I AM. THEN WE’LL SEE WHAT HAPPENS WHEN YOU SCREW THE PUBLIC. THE BEHAVIOR OF INSURANCE COMPANIES AFTER KATRINA SHOWS THE WARPED DELUSION THAT YOU ALL WANT TO LIVE IN. AS FOR YOU, NOBODY IMPORTANT, I WILL AGAIN ASK YOU THE SAME QUESTION. IS THIS ETHICAL? I SAY LET’S UNSEAL ALL COURT RECORDS AND LET’S HAVE A CLOSE LOOK AT THIS INDUSTRIES ACTIONS.

  • September 24, 2009 at 12:56 pm
    Blah, blah, blah says:
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    Big bag of nothing is what I am reading with all that State Farm junk.

    People who want the govt to control any type of insurance do not understand how insurance actually works. Plain and simple. It isn’t worth getting into a discussion over since logic isn’t applicable with those people (only emotion).

  • September 24, 2009 at 6:53 am
    nobody important says:
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    Same troll, same garbage.

  • September 25, 2009 at 10:21 am
    one well deserved. says:
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    one well deserved.
    :
    As a 10 year veteran of the catastrophe adjusting business, I’ve worked
    on numerous State Farm projects, as well as for many other companies.
    All with varying degrees of profit potential. What you’re about to read
    is worth your time … trust me. It may save you from making a big
    mistake.

    We’ve all heard the horror stories which have been circulating for years
    now, about how bad State Farm often treats it’s independent adjusters,
    as well as their policy holders. To date, however, I’ve been mostly
    spared the bad trips many other adjusters have experienced. I’ve made
    money working for State Farm in the past, but it’s getting more and more
    difficult, especially on a large CAT.

    Now I have my own nightmare to add to the stories you’ve heard. By the
    way, it’s true … they do behave like Nazi’s toward independents on
    most of their projects, and care about as little for the independent
    adjuster, as they do for their policy holders. For those who have worked
    for what’s come to be known as Hitler’s “SF,” you know what I’m talking
    about. The latest term I’ve heard to describe them in south Mississippi
    is, “The Great Satan.” This is how angry people have become here.

    This year I was begged, I mean literally begged by a certain
    independent, to come and help them out on their hurricane operation in south Mississippi, because the adjuster before me had
    ditched the storm. Fool that I was, I went to try and help out, only to
    get the worst screwing I’ve gotten in a very long time.

    To begin with, at least a third of the flood files I was given, required
    underwriting reformation before a scope could be agreed to, or any
    advances issued. This process was taking up to 30 days when I left. Keep
    in mind, in many cases these are people out of their homes without
    additional living expenses. Many were so upset, that they were either in
    tears when I arrived, or furious that they couldn’t get any advance
    money. Add to this the problem of closing these files. You can’t close a
    flood claim that is being corrected for underwriting errors. You can’t
    bill it either. We couldn’t even close our no claims, until what has
    come to be known as “The Reformation” is completed on the policy.

    When I asked one of their wealthy agents, who’s home I just happened to
    be handling for minor flood damage, what an elevated structure was, the
    agent admitted to me that she had no clue. And that she had not even
    been to a seminar or workshop on the subject, because they were
    inconveniently held out of town. Far from being an isolated case, there
    are hundreds, possibly thousands of State Farm policy holders all across
    the southern Gulf Coast, who are getting screwed more than they usually
    do by State Farm, all because the company failed to properly school
    and(or) test their agents on how to accurately file the underwriting on
    a dwelling flood policy.

    But the nightmare doesn’t end there, the poor people in many cases will
    owe money when the underwriting errors are corrected, because they were
    being undercharged on their coverage, for in some cases YEARS! Try
    handling a claim where, because of the hurricane, the policy holder owes
    the insurance company money!!! It’s the most negligent situation I’ve
    ever encountered since I started adjusting. It wouldn’t surprise me to
    see a class action lawsuit against them for this, if their isn’t one
    already.

    And get this, the policy holders all say that after they purchased their
    policies, someone came out and inspected their homes in order to verify
    the application. Makes you wonder who’s watching the store here.

    Amazing how these hypocritical bastards will nickel and dime the poor
    people to death, meticulously handling their disaster claims to
    undeniable lean accuracy. Only to handle the underwriting with such a
    disregard for correctness, as to cause a second catastrophe in the poor
    people’s lives.

    It’s as if someone owned a grocery store, who didn’t care to manage the
    receipts for his wholesale inventory, but managed to death, the check
    out clerks, the bagboys, and the customers for shoplifting concerns.
    Going so far as to do body cavity searches of everyone who dares leave
    the store with any merchandise, even though the goods are already paid
    for.

    What’s worse, when I arrived at the CAT two weeks after the storm, no
    one informed me how bad things were, because all they were looking for
    at that point were warm bodies to help control the dam break of
    underwriting errors. Many of the adjusters before me had already fled
    the situation.

    Little did I know that the underwriting problems had created an
    apparently dire legal or political situation, whereby we were told that
    the storm office had to be closed by Thanksgiving. This created an extra
    element of stress during the operation, that became a nightmare for me
    personally. I have a hard time dealing with people who are angry for
    good reason. It’s hard to put a value on your labor under those kinds of
    circumstances, because you have to spend so much of your time hand
    holding. Work like this should be billed at time and expense, or a daily
    rate, it’s that simple.

    Rumor is that the Mississippi State insurance commissioner has caught
    wind of the big mishap, and is coming down hard on State Farm, forcing
    them to rush their claims to completion. Keep in mind that you will
    probably not be paid for the time and effort you put into the files you
    cannot close before they are reassigned. This is common practice with
    State Farm, stealing labor, and don’t kid yourself, the adjusting firms
    you are working for don’t give a damn about you or your money, because
    they will get theirs, regardless.

    When I received my files, many of the insured’s were complaining that we
    were the third and fourth adjuster who had contacted them. This was only
    two weeks into the storm! Why, because it’s getting hard to find good
    adjuster’s willing to be a part of the “SF.” They simply don’t pay
    enough for the garbage you have to put up with, and it creates
    underlying resentment throughout the whole operation. They seem to take
    pride in denying people all the they can, and that includes denying the
    independent adjuster a fair return on their investment of time and
    labor. I swear, working in one of their offices, is often like working
    in a maximum security prison. You have no freedom to do anything, except
    kiss the guards asses continually, while they strip you of every bit of
    pride you ever had in your work. Their arrogance is unequaled in the
    industry, and as I have said, I have worked for just about everybody at
    one time or another.

    My advice. Never ever work for a State Farm catastrophe operation,
    unless it’s minor wind or hail, or you get lucky and are working in an
    independent’s branch completely separated from their offices. Otherwise,
    you will have to put up with 10 times more crap than working for anyone
    else, and if you’re lucky, you’ll make even less money.

    One of the reasons I’ve always liked adjusting property claims in a
    disaster situation, was because I felt like I was helping people.
    Working for State Farm, I rarely have that feeling. Instead, I have the
    feeling that I’m screwing people, and it’s awful. You go home tired at
    night, after spending all day on your inspections, and you think about
    all the people you screwed that day, because by the time you get done
    with withholding their roof tear-off, and their depreciation, and their
    hurricane deductible, they are left with nothing, except a premium
    notice that just keeps on coming, year after year. This business has
    gone down hill precipitously since I got into it ten years ago, and I’m
    seriously thinking of leaving the industry. I just don’t get that good
    feeling I used to, especially working for the Great Satan.

    Which brings to mind something that just bugs the crap out of me. One of
    the worst things State Farm does, in my opinion, is consider partial
    roof replacement a betterment. I wish someone would challenge this in
    court, again and again if necessary, because if I was sitting on a jury,
    I would throw Holy Water all over them on this issue. It’s insane to
    call slope replacement a betterment, and we all know it. In the mind of
    the average Joe it’s a repair, because in most people’s minds the word
    “roof” is singular.

    I have been told that there is a famed attorney who might be willing to
    make our case, due to some common interest in another action he’s
    undertaken, and which is currently pending against State Farm, by the
    policy the holders in the state of Mississippi. Let’s face it, our
    testimony could be devastating to State Farm, if we spoke on behalf of
    the policy holders in any courtroom in the land. It could be the
    greatest bombshell ever to hit the industry, and one well deserved

  • September 25, 2009 at 10:48 am
    Ed B says:
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    wow got heated fast!! What I find hard to believe is that everyone complians bitches and moans about the big four insurance companies and how bad they are but youkeep renewing your policies with them, why? people need to actually start reading the policy and discuss with their agent questions they have about how it will meet the needs of their situation. if they dont answer or its bland find another company and another agent. If your to lazy to really look at the Agent, the Company, and the policy then dont complain when your most valuable assetts or maybe the permenant disability of a loved one is not covered becuase you saved money and never took the time to read the policy and ask questions. If you want to get back at them or rid of them quit buying their product. The government already controls Flood insurance do they not have some issues in Katrina also? I lived in New orleans a big part of the problem was that many people did not even have insurance or the wrong insurance why is that? yes the agent may have done a bad job but guess what it is not his stuff it is yours and your responsibilty to make sure he does his job correctly, if not fire him. people in this country need to grow up and start taking responsibility for themselves, dont forget every time you point the finger at someone 4 are pointg back at you.

  • September 25, 2009 at 11:02 am
    GDed says:
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    pressuring its engineers to alter reports on storm-damaged homes so that water, not wind, could be blamed for damage.

    Is it ethical for State Farm to do this to customer ?What will the State do with that information?

  • September 25, 2009 at 11:08 am
    YOUR HISTORY says:
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    Appeals court fined the company $9.5 million in punitive damages for making use of “a completely bogus” outside bill review company that helped lower the cost of medical bills. In October of 1999, an Illinois jury rendered a $456 million judgment against State Farm and an additional $730 million in punitive damages for the insurer’s breach of contract with auto policy holders by relying on generic replacement parts. Rust was adamant in his insistence that fraud had not been committed. A class action law suit in the name of State Farm policy holders was filed in 2003 for breach of contract and statutory consumer fraud in which $1.1 billion was awarded to plaintiffs. When a company is misleading the public, should that not be considered fraud? A consumer would go to prison for that type of behavior. State Farm will let you know that, in several states, fraud and abuse is pushing up the cost of auto insurance. A court in late 2001 reached an unfriendly consumer decision that could have the effect of reaching deep into the pockets of the consumer. Sharply higher jury awards in vehicular liability cases are putting additional upward pressure on auto insurance rates. The average jury award in auto liability cases rose from $187,000 to $269,000 in 2000, an increase of 44%. I question if any of the lawsuits would be necessary if the company would just fairly pay their claims……..

  • September 25, 2009 at 11:11 am
    YOUR HISTORY ED says:
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    Two former in-house attorneys for State Farm contend that they were often called upon by the insurer to represent its’ policy holders and were forced to commit “unlawful and unethical activities, including requiring the two to stay silent about the rights of the policyholders”. State Farm seems to have reckless indifference for the truth for the purpose of corporate and personal economic gain.

  • September 26, 2009 at 7:02 am
    nobody important says:
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    Congratulations, you are officially one of the most obnoxious blow hard, know nothing trolls ever to post on this site. That’s a significant achievement with the idiots who post this type of trash.

  • September 26, 2009 at 11:42 am
    SOMEONE IMPORTANT says:
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    REMMBER THE QUESTION ABOUT ETHICS.nobody important????

  • September 28, 2009 at 8:28 am
    nobody important says:
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    You first. Which law firm or “consumer advocate” firm pays you for these posts? Did you notice that virtually nobody posts their actual name or company on here? I protect myself and my company from idiots like yourself. I don’t need either a self appointed crusader or a psychotic idiot (take your choice) such as your self knowing the slightest fact about me. Why is this about me? You are the one posting “facts” you cut and paste from liberal or “consumer” web sites constantly. Do you even have an opinion not given to you by your employers? I do. I’m proud of what I do and who I work for, I wish could could say the same. Without naming your employer, what do you do for a living besides post trash about an industry you don’t understand?

  • September 28, 2009 at 9:22 am
    SOMEONE IMPORTANT says:
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    Please do tell all of us want company that would be……………

  • September 28, 2009 at 9:25 am
    SOMEONE IMPORTANT says:
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    WOW YOU REALLY KNOW HOW TO DISH IT OUT .. AND BY THE WAY THE THINGS I HAVE POSTED HAVE BEEN COURT RECORDS. I DID NOT MAKE THIS CRAP UP. I DO NOT GET PAID. PLEASE TRY TO GET THAT IF YOU CAN. IF YOU THINK YOUR COMPANY IS SO GREAT THEN PLEASE DO TELL THE PUBLIC.OR WILL YOU RUN AND HIDE LIKE YOU ALWAYS DO???

  • September 28, 2009 at 6:50 am
    nobody important says:
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    Yes, you don’t have any. I work for a highly ethical company and have always prided myself on my own personal honesty. I wish trolls like you could say the same.

  • September 29, 2009 at 7:26 am
    SOMEONE IMPORTANT says:
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    Name calling is not nice is this the way you treat policy holders?

  • September 29, 2009 at 7:30 am
    SOMEONE IMPORTANT says:
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    BILOXI, Miss. (MCT) — In some cases, State Farm’s top leadership prefers not to share or even keep records that offer insight into how policyholder claims are handled, according to court records.

    Chairman and CEO Edward B. Rust Jr. said in sworn testimony earlier this month that no minutes are kept of quarterly meetings held by the company’s top management, the Chairman’s Council, and that policyholders have no right to information about an investigation State Farm Insurance Cos. has ordered of its relationship with Haag Engineering Co.

    State Farm spokesman Phil Supple said the company doesn’t “intend to-;try this-;case in the media.”

    “State Farm stands by testimony given by President and Vice Chairman Vince Trosino, who said when asked about these allegations, ‘It’s not part of our system. It’s not part of our core values. It’s not what made us the most successful property and casualty insurer, life insurer, in the country.'”

    Juries in two states, Texas and Oklahoma, have found Haag provided biased reports to State Farm to minimize or deny policyholder claims. Mississippi’s attorney general currently is conducting a grand jury investigation to determine whether State Farm and other insurers denied Hurricane Katrina claims through the use of fraudulent engineering reports.

    Haag denies bias, but State Farm suspended business with the company in June and ordered an independent investigation after an Oklahoma jury awarded a total of $13 million to a policyholder over tornado damages. Subsequent trials are set to determine damages for 70 other policyholders, all of whom had claims investigated by Haag.

    In past court cases, judges have chastised and even fined State Farm for withholding records the company was ordered to produce. Evidence the company destroyed documents has been presented in several cases.

    In the Oklahoma case, after State Farm finally turned over to the court a “claims legal research” DVD and other records, Judge Richard G. Van Dyck told company attorneys

    “As I was watching these tapes I just want to say this for the record, the hair on the back of my neck did — did stand up because I was seeing things there that early on in this case I was told by (State Farm) defense counsel didn’t exist and couldn’t be produced. So I’m not real happy with that and I want to remind all counsel that their ethical responsibilities as attorneys outweigh the wishes of their clients.”

    Gary T. Fye, an expert in the analysis of disputed insurance claims who lives in Nevada, often testifies in insurance cases. Fye, who said he has testified on behalf of policyholders and insurance companies, has provided the courts information on State Farm’s history of destroying and withholding records.

    In 1998, Fye wrote in a Florida case

    “I have been witnessing document destruction, concealment, and obstruction of discovery by State Farm for many years in connection with my review of internal claim practices documents of the insurer. I have accumulated certain Exhibits which show the company’s goals and objectives for document handling by its employees. The documents show close to 28 years of intentional destruction, concealment and distortion of claim practices records.”

    In some cases, company executives did not keep records.

    Jeff Marr, the attorney suing State Farm in Oklahoma, took sworn testimony Sept. 6 from Rust. Topics included Rust’s Chairman’s Council, made up of top State Farm executives. The group, which includes the company’s general counsel, meets quarterly.

    Marr was fishing for records of those meetings that he could subpoena for his lawsuit.

    “Certainly,” Marr asked Rust, “you keep records of the quarterly meetings where the entire Chairman’s Council is present?”

    “We have an agenda,” Rust said, “but minutes in that, no.”

    “Why not?” Marr asked.

    Rust replied, “Never felt a need to.”

    Marr later asked, “Are there any written agendas that are available should I choose to request them in the lawsuit?”

    “I’m not sure what might be available,” Rust said.

    Rust also said policyholders, who essentially own the private mutual company, are not entitled to know what the Chairman’s Council discusses or decides about litigation against State Farm, citing attorney-client privilege.

    Marr questioned why the company would withhold information from policyholders, who own State Farm.

    “Well, again,” said Rust (who has a law degree), “I’m not an expert in the area, but I think as you find — even if I’m a shareholder in a publicly traded company, there are things that are not — you know, I do not have access to.”

    Marr later asked if policyholders have a right to see documents from State Farm’s investigation of Haag.

    “No,” Rust said.

    “Why not?” Marr asked. “Is it privileged?”

    Rust said, “I believe so
    Subject Posted By Posted On
    ED RUST JR TOJail with Alberto R. Gonzales criminal investigation

  • September 29, 2009 at 7:35 am
    SOMEONE IMPORTANT says:
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    People need to actually start reading the policy. WHAT A JOKE. READ THE POLICY YOU HAVE 800 IN HOUSE ATTORNIES AND THAN YOU CHANGE THE POLICY MONTHLY . YOUR WORDING DOES NOT FIT WEBSTER’S

  • September 29, 2009 at 2:36 am
    nobody important says:
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    I’m not hiding from anything. You go ahead and post just your actual occupation. You know mine. What are you hiding from? You cherry pick a few isolated incidents and try to paint my entire industry as dishonesty and lacking in ethics. Idiotic. I don’t suppose cutting and pasting someone else’s work really would pay much anyway. Try having a thought of your own for once.

  • September 29, 2009 at 2:37 am
    nobody important says:
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    Oh, I forgot, you are a Troll.

  • September 30, 2009 at 9:28 am
    nobody important says:
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    I’m done with reading your moronic posts. I shouldn’t have been tempted to respond to a cut and paste troll to begin with. You win, every insurance person should be jailed. I give. Your logic is so inescapeable. Now, will you go back to moveon.org or the Huffington post where you belong? Adults use this forum to discuss real issues.

  • September 30, 2009 at 9:38 am
    distortion of claim practices says:
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    As I was watching these tapes I just want to say this for the record, the
    hair on the back of my neck did — did stand up because I was seeing things
    there that early on in this case I was told by (State Farm) defense counsel
    didn’t exist and couldn’t be produced. So I’m not real happy with that and I
    want to remind all counsel that their ethical responsibilities as attorneys
    outweigh the wishes of their clients.”

    Gary T. Fye, an expert in the analysis of disputed insurance claims who
    lives in Nevada, often testifies in insurance cases. Fye, who said he has
    testified on behalf of policyholders and insurance companies, has provided
    the courts information on State Farm’s history of destroying and withholding
    records.

    In 1998, Fye wrote in a Florida case

    “I have been witnessing document destruction, concealment, and obstruction
    of discovery by State Farm for many years in connection with my review of
    internal claim practices documents of the insurer. I have accumulated
    certain Exhibits which show the company’s goals and objectives for document
    handling by its employees. The documents show close to 28 years of
    intentional destruction, concealment and distortion of claim practices
    records.”

    In some cases, company executives did not keep records.

    Jeff Marr, the attorney suing State Farm in Oklahoma, took sworn testimony
    Sept. 6 from Rust. Topics included Rust’s Chairman’s Council, made up of top
    State Farm executives. The group, which includes the company’s general
    counsel, meets quarterly.

    Marr was fishing for records of those meetings that he could subpoena for
    his lawsuit.

    “Certainly,” Marr asked Rust, “you keep records of the quarterly meetings
    where the entire Chairman’s Council is present?”

    “We have an agenda,” Rust said, “but minutes in that, no.”

    “Why not?” Marr asked.

    Rust replied, “Never felt a need to.”

    Marr later asked, “Are there any written agendas that are available should I
    choose to request them in the lawsuit?”

    “I’m not sure what might be available,” Rust said.

    Rust also said policyholders, who essentially own the private mutual
    company, are not entitled to know what the Chairman’s Council discusses or
    decides about litigation against State Farm, citing attorney-client
    privilege.

    Marr questioned why the company would withhold information from
    policyholders, who own State Farm.

    “Well, again,” said Rust (who has a law degree), “I’m not an expert in the
    area, but I think as you find — even if I’m a shareholder in a publicly
    traded company, there are things that are not — you know, I do not have
    access to.”

    Marr later asked if policyholders have a right to see documents from State
    Farm’s investigation of Haag.

    “No,” Rust said.

    “Why not?” Marr asked. “Is it privileged?”

    Rust said, “I believe so.”
    ;;;The documents show close to 28 years of
    intentional destruction, concealment and distortion of claim practices
    records.”

  • October 2, 2009 at 9:18 am
    nobody import says:
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    A three-and-a-half year lawsuit pitting two former State Farm agents against State Farm Automobile Insurance Company has come to an end, with the jury’s verdict ruling for the agents.

    Richard Pyorre of Fort Bragg, Calif. and John Wier of Crescent City, Calif., were awarded $6.35 million and $6.25 million, respectively for emotional distress damages, loss of commissions and punitive damages as the result of a seven- week trial in which State Farm sued the two agents for alleged disclosure of trade secrets and breach of contract.

    Pyorre and Weir counter-sued; claiming State Farm wrongfully terminated them and further interfered with their ability to provide insurance to their clients under different carriers.

    The lawsuit brought to light mounting concerns over the rights to client information in the captive agency system.

    Pyorre’s contract was terminated on Feb. 28, 1999 after serving as a State Farm captive agent for 27 years. According to Pyorre, the company allegedly claimed that he was terminated because he did not attend a “mandatory” ethics class. That claim was debunked when State Farm argued to the IRS in 1991 that their agents were independent contractors under an SS8 filing (determination of employee work status), thus there would be no punitive damages if an agent did not attend a meeting.

    Evidence of this was produced at the trial in the form of a letter from Ed Russ, Jr., dated Dec. 23, 1991, referring to the 1991 SS8 filing, stating that State Farm would not compromise the independent contractor’s status of the agent. “That’s one of the things that I felt very strongly about,” said Pyorre. ” I had seen his letter… and I felt I didn’t have to attend a mandatory meeting, because there had never been any in the history of the company at that time.

    “To add insult to injury, this ethics class was an LUTC self-study course,” said Pyorre. “[It] really wasn’t an ethics class, it was an initial review of banking products… which I wasn’t interested in doing.”

    In another development, State Farm sent Pyorre a letter on March 19 stating that they were not going to pay him termination benefits because Pyorre allegedly disclosed trade secrets by soliciting policyholders to represent under carriers other than State Farm.

    State Farm allegedly terminated Wier over a dispute involving a computer agreement. “I was terminated, or discontinued was the word they used, for signing a computer agreement with the words under my signature ‘with full reservation of my main contract rights,'” said Wier.

    The new technology agreement allowed State Farm to move policyholder information out of agents’ offices to a central hub in Arizona, requiring the agent to use a password to access the information.

    “Obviously they were going to use it to cross market,” said William Tedards, attorney for Pyorre and Wier. “[Wier] was opposed to that, so he refused to sign this agreement that they demanded unless he could put underneath it a line that said he could reserve rights under his main contract.”

    Tedards alleged that Pyorre, Wier and other agents were punished when they shied away from State Farm’s structuring changes in the ’90s, which strongly suggested agents turn to the sale of financial service products in order to make extra income. “They basically said ‘We’re going to ride a different train now, and you better get on if you’re coming with us.'”

    State Farm introduced a new contract in the mid-’90s allegedly designed to put the agents under control of the company, although agents were still referred to as independent contractors, according to Tedards. “It’s designed to set them up so that they will slow down [personal lines] and they will barrel forward into financial services. The contract gives the company the power to limit their growth.”

    While the contract was not mandatory for agents to enter into agreement to, Tedards said agents were nevertheless influenced to sign it. While many new State Farm agents have reportedly signed the contract with little resistance, older agents were more apprehensive. “What they started doing with those people is essentially bludgeoning them,” said Tedards. “They decided that they had enough control over them that they could start either making them do what they want or getting rid of them.”

    State Farm claimed to own all policyholder information from terminated agents, claiming it as trade secrets. “The Pyorre and Wier case is the prototype test case challenging that entire course of action,” said Tedards.

    “They [Pyorre and Wier] just challenged that head-on,” added Tedards. “They took a full copy of all the policyholder information. They initiated new independent agent-type contracts with a number of companies including Mercury, and then they basically started contacting the policyholders and taking the business. State Farm attacked them for that. Interestingly, State Farm first tried to turn them into the Federal Bureau of Investigations, [trying] to instigate a criminal proceeding under the Economic Espionage Act, and the U.S. Attorney declined to prosecute.”

    The jury found that Pyorre and Wier were not guilty of State Farm’s allegations, including disclosure of trade secrets and breach of contract.

    They further ruled that State Farm interfered with Pyorre and Wier’s contracts with Mercury Automobile Insurance. “[The] verdict is based on that activity by State Farm-intimidating Mercury, said Tedards. “They found that State Farm did not own the policyholder information. The significance of this is that none of these companies own this.”

    Of the total $12.6 million awarded to the pair, $350,000 was awarded to Pyorre, and $250,000 to Wier as the amount of lost commissions due to the interference. Three million each was awarded as emotional distress damages.

    Another $3 million each was awarded to the pair as punitive damages

    “It’s about time that one of these big bully corporations got taken to task,” said Pyorre. “It’s a $70 billion dollar company and they terminated us, they took our term pay… then they turned around and sued us and wanted more money.”

    “It’s a victory,” said Weir. “I’m just very thankful to the jury and the time they put in. I feel my reputation as well as Rich’s has been vindicated.”

    As for State Farm, spokes-person Bill Syrolla said, “We regret that an issue like this ever had to end up in court. We are reviewing the case to see what options we might pursue.”



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