Cincinnati Financial Corp. told shareholders that two property insurance companies it controls are under investigation by Florida officials looking into whether insurers are complying with a new law requiring rate reductions.
The company said it has been served subpoenas by the Florida Office of Insurance Regulation, seeking correspondence with trade groups and other documents related to how the two subsidiaries set their rates.
The two subsidiaries are Cincinnati Insurance and Cincinnati Indemnity.
A state law passed earlier this year expanded the amount of state backup reinsurance coverage available to insurance companies doing business here. Because they should be able to save money on reinsurance, the companies are required to pass savings on to customers under the law.
But Florida Gov. Charlie Crist and Insurance Commissioner Kevin McCarty have said they believe some companies may be keeping premiums illegally high.
Officials from the two Cincinnati companies were ordered to testify at a public hearing scheduled for Oct. 18 in Tallahassee.
The company has asked a judge to narrow the request, saying that the amount of information it is being asked to produce is too broad and burdensome. But in the meantime, the company said it will comply the best it can.
“The companies are endeavoring to produce responsive documents by the stated deadlines and will continue to work with the Florida Office of Insurance,” a statement from the company said.
Cincinnati is a relatively small insurer in Florida, with fewer than 13,000 home policies. It is not writing new policies in the state.
Information from: The News-Press, http://www.news-press.com
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