Please look at the matter of why State Farm is objecting to this withdrawl plan.
Not allowing State Farm agents to write fire business for other carriers. If State Farm doesn’t want the business why won’t it allow its agents to write for other companies? This alone should tell you what type of company State Farm has become.
They say they are the “good neighbor” but if your neighbor quit making a product you were selling for them would you think of it as “good” if you couldn’t sell a similar product for anyone else? Isn’t this the way a spoiled brat reacts when they don’t get their way?
Is this a restraint of trade and is it in the best interest of the policyholder, the agent and the State of Florida?
If State Farm doesn’t want to write business in Florida then how should they be able to control both the policyholders and the agents by refusing to allow their agents to write business elsewhere? This is just another way for them to try to control the market conditions.
Finally does anyone really believe State Farm Florida must withdraw from the market to avoid insolvency? They said they are losing $20 Million a month but yet they paid their top 9 executives $49 Million last year.
Hey, here is a suggestion reduce the top salaries of these fat cats to a measly $500,000 and you will save $44.5 Million, more than 2 months supposed loss in Florida. Maybe also stop advertising for fire business in Florida when you aren’t writing it anymore!
Why would they transfer the crappy risks to the Citizens of Florida and put them at a financial burden and have the taxpayers bail them out again and again and subject them to assessment.
Rich, You clearly are not a supporter of capitalism. If you don’t “believe” State Farm that they are not making money in Florida, why do you think they would leave?? If they’re “just kidding” and really are stuffing money in the wallets of employees as you suggest, they’d be sticking around! They’re not making money!
They want out!!! They’re fed up with Crist! I can’t stand the guy, and I live in Kansas!
And, you ask, why wouldn’t they want their employees to write for other companies??? Because they don’t work for other companies!!!!! State Farm, as most direct writing insurance carriers, has contracts with their agents to sell “their products”. State Farm provides a name, marketing,training, legal support, and so forth (which costs SF money), to their contracted agents. Obviously, State Farm is not in the business of supporting people to work for others. When the contracts are up, those workers are free to go work for someone else. That’s a voluntary contractual arrangement on the part of both.
Capping salaries??? Why? I think I’m going to cap your salary at $1.45/hr. See how arbitrarily ignorant that is?
THIS IS WHAT IS HAPPENING WITH MCCARTY AND GOV CRIST’S BLESSINGS IN FLORIDA!
1. Start a company with borrowed 5 million.
2. Create a MGA to administer (Ha) the company.
3 Charge 65% of the premiums for doing so.
4. Put together some bulls*it reinsurance
5. Give the keys to FIGA when the wind blows.
6. Let all the citizens and good carriers,if there are any left to pay for your loses through FIGA assessments.
7. Pay off the 5 million loan and pocket the rest through your MGA.
WAKE UP! Florida, Do you really want to be insured by one of these carriers after a storm.
is like watching a Cohen brothers movie. Just when you think the protagonist cannot add any more stupidity, along comes more stupidity. They don’t want State Farm to remain financially viable, they don’t want to give citizens the choice to pay an adequate rate or not, and they don’t want those same citizens purchasing insurance from the carrier of last (and lost) resort, Citizens! Does ‘Crist almighty’ really have such conceptual difficulty with a) an exclusive contract and 2) private enterprise? Does he not understand that he solves a lot of problems, mostly his own, by admitting error and letting the market work, inexpensively? Who, or rather, how the hell did this RINO get elected?
First of all when someone signs on to a captive agent arrangement like State Farm, All state; they have distinct market advantages and with that come certain contractual responsibilities. If the agents feel that strongly about the situation, let them brave the real word of the independent agent system. They can always tell statefarm to take a hike and move the clients anyway once they find a cmpany willing t contract with them. Those are my two cents.
And no I am not a statefarm aganet and could care less whether they stay or go.
Non-compete clauses. I believe they would prohibit the captives from farming out their current books to other carriers without significant financial penalties to the agency. And I’m sure that the agents looked at the up side of State Farm before locking in. A national marketing presence, great name recognition, financial stability of a large carrier… What I don’t understand is why there is still a cadre of people out there that believe a multi-million dollar compensation package is still due to execs who don’t perform. This past year has been a perfect example. Line level employees are executing the strategic/tactical plans of the management of the company to the best of their ability. But when the strategy is flawed, let’s say like trading in collateralized default swap contracts, who pays for it? The employees get laid off, maybe with a severence package but the CEO gets bonuses because he/she (mostly he) was able to cut costs for the company that year. But cost cutting wouldn’t have been necessary in the first place if the company had focused on long term financial performance versus maximizing the stock price this quarter. Not to mention that the cost cutting via lay offs are usually way offset by the amount of the bonus paid to the top level management.
Look, I don’t advocate a socialist society. I advocate a fair society, one that pays an honest dollar for an honest day’s work. When State Farm indicated that they were pulling out of the state they should have allowed their agencies to go independant. That would have expedited the pull out, allowed the free market to fill the vacuum – somebody is going to be hungry for those millions in premium payments – kept the good agencies in business and allowed the poor agencies to fail. That would be a market based solution and an even playing field.
I can only think of three “Take-out” companies who have failed over the years. Sounds stable enough for me. At least they’re more committed to the marketplace than State Farm, Allstate or Nationwide. And if take-out didn’t fail in 04-05, then I’d say they’re not on such poor footing as you’re describing.
well,
1) can’t be allowed to write other policies, since they still have policies they have to continue to service the existing policies. so there is no way, they will allow their agents to do otherwise. that would be like breaking a contract — oops! does the state realize what they are asking?! probably don’t care! just like their homeowner casualty, why they are in the red and still need money from others.
2) that is the other problem i have, as a new insured into the state of florida, why does my insurance have to have fl castrophe coverage to be pd to the state for the old claims it does not have money for? WOW! how is that fair? if it were me, i’d be suing the government back for my portion. past is the past, not present. if i moved fm ak to fl, because i liked to be warm, i might not want to move at all, at least not there if they are going to take more of my money for the past issues. granted, there is no personal property tax — ooh, a thought. we have a way to pay for future occurances that can happen.
Super G, most takeouts started AFTER 04-05 and have never been through the “claims paying” test. Additionally, the takeouts that did exist prior to 04-05 had very little exposure. Poe had gobbled-up most of the IA market share. Plus I believe that Fla had at least 8 insolvencies after 04-05.
In reply to some who disagree with my previous post:
HOORAY FOR CAPITALISM apparently doesn’t understand the State Farm agent is supposed to be an independent contractor not an employee. If you understand capitalism you would know it should be a fee market without limiting choice like State Farm is doing.
GILL FIN: I was terminated for not attending a mandatory meeting.
MILO: You don’t seem to understand State Farm is refusing to allow the agents to write for another company even though they don’t want the business. My case is an example of this. I was terminated and then started a brokerage and was sued by State Farm for theft of trade secrets. State Farm lost the first jury trial but convinced a judge to throw it out. We have been in litigation for 10 years and it continues.
Capitalism has nothing to do with employee versus independent contractor relationships. I’m sure if you read the independent contractor agreement you signed with State Farm, it would have clearly spelled out that you are not to be writing for other companies. You were free to walk away from that arrangement before signing, but apparently instead chose to take whatever was given you by State Farm, only to breach your agreement with them.
State Farm is not exiting the automobile business, so obviously they don’t want their State Farm Auto insured’s walking in to pay their auto premium, only to find the agent, free to write for everyone AND State Farm saying “hey want an auto quote from company B?” Those are called independent agents, and that is not what State Farm uses to write business.
You act as though State Farm is the Ball and Chain to the agent when in reality that arrangement works quite well for many State Farm agents.
I have a better idea: Why don’t you get a charter, come up with the initial funding, hire your own people, and start YOUR OWN INSURANCE COMPANY. Then you can do it how you like, as long as it’s legal.
It’s only fair that State Farm close its Florida homeowners business. First, SF isolated Florida so that all the other policyholders across the country didn’t have to bear the weight of exposure. Then, it realized SF-F was going to continue to lose money so it went through proper channels to remedy the situation. When crist denied that, then SF did the only thing it could. I pity all the homeowners who will have a major loss here in the coming years only to find out that the state and/or new insurer are bankrupt.
On allowing SF agent to sell other homeowner’s policies: that opens a bad door. When policyholders sue they generally include the agent that sold them the policy. If a SF agent sold them the policy and took the premium, then the ph will try to include SF regardless of whether SF insures them or not. Everybody looks at “big” companies as deep pockets and wants every penny. Mark my words: a CAT- 4 or 5 hurricane is just around the corner and it will destroy a portion of FL. When it does, it want SF to be gone from FL. The best thing a SF agent can do is find a few good referral insurers and pass them along. I have numerous ph with homes in both states, that’s what I do. The contract I signed (97) states I can only sell SF and SF sanctioned policies. That part is up to SF. If I continue to “work” for SF is up to me. That’s life, fair or not fair, get used to it.
Allstate allows their agents to write through other home insurance companies but only Allstate for auto. I don’t see why SF can’t do the same.
As for SF getting dragging into a lawsuit… it’s very simple, they create a disclosure form to have signed by the insured saying they know they don’t have SF for their home insurance.
And, I bet their contract with SF actually says they are to write exclusively for SF UNLESS GIVEN PERMISSION IN WRITING BY SF FOR OTHER APPOINTMENTS. This is how Allstate’s contract is written and it’d be very easy for SF to do the same.
AND lastly, I bet if SF came up with a new contract for their agents to sign making home and property independent and auto lines exclusive, all of their agents would sign it.
I don’t really see why some of you think it’s a difficult deal, the contracts. They’re very easily revised…..
I am sorry to hear youve been in court however when you signed on with state farm didnt you sign a contract which spelled out the rules? If state farm allows their captive agents to sell other companies then it is opening a door to allow state farm to market its products through the independent agency system. Yeh!
This SF mess in Florida has got to have a negative effect on their ability to recruit new agents everywhere in the US. I’ve been a Farmers agent in the Dallas area for almost 30 years. Some of my SF friends are nearing retirement age – nearing the time they should be preparing someone to replace them. SF has also put restraints on their Texas agent’s ability to write home insurance off and on the past 15 years. Any young person looking to start their own agency would have to be reluctant about accepting a SF contract given these types of situations.
Please look at the matter of why State Farm is objecting to this withdrawl plan.
Not allowing State Farm agents to write fire business for other carriers. If State Farm doesn’t want the business why won’t it allow its agents to write for other companies? This alone should tell you what type of company State Farm has become.
They say they are the “good neighbor” but if your neighbor quit making a product you were selling for them would you think of it as “good” if you couldn’t sell a similar product for anyone else? Isn’t this the way a spoiled brat reacts when they don’t get their way?
Is this a restraint of trade and is it in the best interest of the policyholder, the agent and the State of Florida?
If State Farm doesn’t want to write business in Florida then how should they be able to control both the policyholders and the agents by refusing to allow their agents to write business elsewhere? This is just another way for them to try to control the market conditions.
Finally does anyone really believe State Farm Florida must withdraw from the market to avoid insolvency? They said they are losing $20 Million a month but yet they paid their top 9 executives $49 Million last year.
Hey, here is a suggestion reduce the top salaries of these fat cats to a measly $500,000 and you will save $44.5 Million, more than 2 months supposed loss in Florida. Maybe also stop advertising for fire business in Florida when you aren’t writing it anymore!
When will the idiots at State Farm pull out?
Why would they transfer the crappy risks to the Citizens of Florida and put them at a financial burden and have the taxpayers bail them out again and again and subject them to assessment.
Why would State Farm agents bare an E&O exposure?
Rich, You clearly are not a supporter of capitalism. If you don’t “believe” State Farm that they are not making money in Florida, why do you think they would leave?? If they’re “just kidding” and really are stuffing money in the wallets of employees as you suggest, they’d be sticking around! They’re not making money!
They want out!!! They’re fed up with Crist! I can’t stand the guy, and I live in Kansas!
And, you ask, why wouldn’t they want their employees to write for other companies??? Because they don’t work for other companies!!!!! State Farm, as most direct writing insurance carriers, has contracts with their agents to sell “their products”. State Farm provides a name, marketing,training, legal support, and so forth (which costs SF money), to their contracted agents. Obviously, State Farm is not in the business of supporting people to work for others. When the contracts are up, those workers are free to go work for someone else. That’s a voluntary contractual arrangement on the part of both.
Capping salaries??? Why? I think I’m going to cap your salary at $1.45/hr. See how arbitrarily ignorant that is?
I would like to know.
THIS IS WHAT IS HAPPENING WITH MCCARTY AND GOV CRIST’S BLESSINGS IN FLORIDA!
1. Start a company with borrowed 5 million.
2. Create a MGA to administer (Ha) the company.
3 Charge 65% of the premiums for doing so.
4. Put together some bulls*it reinsurance
5. Give the keys to FIGA when the wind blows.
6. Let all the citizens and good carriers,if there are any left to pay for your loses through FIGA assessments.
7. Pay off the 5 million loan and pocket the rest through your MGA.
WAKE UP! Florida, Do you really want to be insured by one of these carriers after a storm.
is like watching a Cohen brothers movie. Just when you think the protagonist cannot add any more stupidity, along comes more stupidity. They don’t want State Farm to remain financially viable, they don’t want to give citizens the choice to pay an adequate rate or not, and they don’t want those same citizens purchasing insurance from the carrier of last (and lost) resort, Citizens! Does ‘Crist almighty’ really have such conceptual difficulty with a) an exclusive contract and 2) private enterprise? Does he not understand that he solves a lot of problems, mostly his own, by admitting error and letting the market work, inexpensively? Who, or rather, how the hell did this RINO get elected?
First of all when someone signs on to a captive agent arrangement like State Farm, All state; they have distinct market advantages and with that come certain contractual responsibilities. If the agents feel that strongly about the situation, let them brave the real word of the independent agent system. They can always tell statefarm to take a hike and move the clients anyway once they find a cmpany willing t contract with them. Those are my two cents.
And no I am not a statefarm aganet and could care less whether they stay or go.
Non-compete clauses. I believe they would prohibit the captives from farming out their current books to other carriers without significant financial penalties to the agency. And I’m sure that the agents looked at the up side of State Farm before locking in. A national marketing presence, great name recognition, financial stability of a large carrier… What I don’t understand is why there is still a cadre of people out there that believe a multi-million dollar compensation package is still due to execs who don’t perform. This past year has been a perfect example. Line level employees are executing the strategic/tactical plans of the management of the company to the best of their ability. But when the strategy is flawed, let’s say like trading in collateralized default swap contracts, who pays for it? The employees get laid off, maybe with a severence package but the CEO gets bonuses because he/she (mostly he) was able to cut costs for the company that year. But cost cutting wouldn’t have been necessary in the first place if the company had focused on long term financial performance versus maximizing the stock price this quarter. Not to mention that the cost cutting via lay offs are usually way offset by the amount of the bonus paid to the top level management.
Look, I don’t advocate a socialist society. I advocate a fair society, one that pays an honest dollar for an honest day’s work. When State Farm indicated that they were pulling out of the state they should have allowed their agencies to go independant. That would have expedited the pull out, allowed the free market to fill the vacuum – somebody is going to be hungry for those millions in premium payments – kept the good agencies in business and allowed the poor agencies to fail. That would be a market based solution and an even playing field.
I can only think of three “Take-out” companies who have failed over the years. Sounds stable enough for me. At least they’re more committed to the marketplace than State Farm, Allstate or Nationwide. And if take-out didn’t fail in 04-05, then I’d say they’re not on such poor footing as you’re describing.
well,
1) can’t be allowed to write other policies, since they still have policies they have to continue to service the existing policies. so there is no way, they will allow their agents to do otherwise. that would be like breaking a contract — oops! does the state realize what they are asking?! probably don’t care! just like their homeowner casualty, why they are in the red and still need money from others.
2) that is the other problem i have, as a new insured into the state of florida, why does my insurance have to have fl castrophe coverage to be pd to the state for the old claims it does not have money for? WOW! how is that fair? if it were me, i’d be suing the government back for my portion. past is the past, not present. if i moved fm ak to fl, because i liked to be warm, i might not want to move at all, at least not there if they are going to take more of my money for the past issues. granted, there is no personal property tax — ooh, a thought. we have a way to pay for future occurances that can happen.
Super G, most takeouts started AFTER 04-05 and have never been through the “claims paying” test. Additionally, the takeouts that did exist prior to 04-05 had very little exposure. Poe had gobbled-up most of the IA market share. Plus I believe that Fla had at least 8 insolvencies after 04-05.
In reply to some who disagree with my previous post:
HOORAY FOR CAPITALISM apparently doesn’t understand the State Farm agent is supposed to be an independent contractor not an employee. If you understand capitalism you would know it should be a fee market without limiting choice like State Farm is doing.
GILL FIN: I was terminated for not attending a mandatory meeting.
MILO: You don’t seem to understand State Farm is refusing to allow the agents to write for another company even though they don’t want the business. My case is an example of this. I was terminated and then started a brokerage and was sued by State Farm for theft of trade secrets. State Farm lost the first jury trial but convinced a judge to throw it out. We have been in litigation for 10 years and it continues.
Rich,
Capitalism has nothing to do with employee versus independent contractor relationships. I’m sure if you read the independent contractor agreement you signed with State Farm, it would have clearly spelled out that you are not to be writing for other companies. You were free to walk away from that arrangement before signing, but apparently instead chose to take whatever was given you by State Farm, only to breach your agreement with them.
State Farm is not exiting the automobile business, so obviously they don’t want their State Farm Auto insured’s walking in to pay their auto premium, only to find the agent, free to write for everyone AND State Farm saying “hey want an auto quote from company B?” Those are called independent agents, and that is not what State Farm uses to write business.
You act as though State Farm is the Ball and Chain to the agent when in reality that arrangement works quite well for many State Farm agents.
I have a better idea: Why don’t you get a charter, come up with the initial funding, hire your own people, and start YOUR OWN INSURANCE COMPANY. Then you can do it how you like, as long as it’s legal.
Ladies and Gentlemen,
It’s only fair that State Farm close its Florida homeowners business. First, SF isolated Florida so that all the other policyholders across the country didn’t have to bear the weight of exposure. Then, it realized SF-F was going to continue to lose money so it went through proper channels to remedy the situation. When crist denied that, then SF did the only thing it could. I pity all the homeowners who will have a major loss here in the coming years only to find out that the state and/or new insurer are bankrupt.
On allowing SF agent to sell other homeowner’s policies: that opens a bad door. When policyholders sue they generally include the agent that sold them the policy. If a SF agent sold them the policy and took the premium, then the ph will try to include SF regardless of whether SF insures them or not. Everybody looks at “big” companies as deep pockets and wants every penny. Mark my words: a CAT- 4 or 5 hurricane is just around the corner and it will destroy a portion of FL. When it does, it want SF to be gone from FL. The best thing a SF agent can do is find a few good referral insurers and pass them along. I have numerous ph with homes in both states, that’s what I do. The contract I signed (97) states I can only sell SF and SF sanctioned policies. That part is up to SF. If I continue to “work” for SF is up to me. That’s life, fair or not fair, get used to it.
Allstate allows their agents to write through other home insurance companies but only Allstate for auto. I don’t see why SF can’t do the same.
As for SF getting dragging into a lawsuit… it’s very simple, they create a disclosure form to have signed by the insured saying they know they don’t have SF for their home insurance.
And, I bet their contract with SF actually says they are to write exclusively for SF UNLESS GIVEN PERMISSION IN WRITING BY SF FOR OTHER APPOINTMENTS. This is how Allstate’s contract is written and it’d be very easy for SF to do the same.
AND lastly, I bet if SF came up with a new contract for their agents to sign making home and property independent and auto lines exclusive, all of their agents would sign it.
I don’t really see why some of you think it’s a difficult deal, the contracts. They’re very easily revised…..
I am sorry to hear youve been in court however when you signed on with state farm didnt you sign a contract which spelled out the rules? If state farm allows their captive agents to sell other companies then it is opening a door to allow state farm to market its products through the independent agency system. Yeh!
This SF mess in Florida has got to have a negative effect on their ability to recruit new agents everywhere in the US. I’ve been a Farmers agent in the Dallas area for almost 30 years. Some of my SF friends are nearing retirement age – nearing the time they should be preparing someone to replace them. SF has also put restraints on their Texas agent’s ability to write home insurance off and on the past 15 years. Any young person looking to start their own agency would have to be reluctant about accepting a SF contract given these types of situations.