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State Keeping Eye On Insurer Discounts

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By RUSSELL RAY

The Tampa Tribune

Published: September 13, 2008

TAMPA - Regulators this week ordered State Farm Florida to refund $120 million after it failed to give thousands of policyholders the discounts they deserved for making their homes more resistant to hurricanes.

Although the state doesn't suspect other insurers of holding back discounts, the action against State Farm should put the industry on notice, said Ed Domansky, spokesman for the Office of Insurance Regulation.
Insurance Commissioner Kevin McCarty is "keeping a close eye on whether they are all being compliant with the requirements of the law," Domansky said. "If something should turn up that requires action, it would definitely be taken."

State Farm, Florida's largest private property insurer, discovered the problem, reported it to regulators and agreed to issue credits or refunds.

About 98,000 current and former State Farm policyholders were not given discounts for making improvements to prevent storm damage to their homes. The company also agreed to pay a $1 million fine.

The order comes as State Farm and Florida regulators battle over the company's request to raise home insurance rates an average of 47.1 percent statewide.

The state agency rejected the proposal as well as the company's request for a hearing. State Farm has until Monday to amend its request for a hearing.

Reporter Russell Ray can be reached at (813) 259-7870 or rray@tampatrib.com.

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