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State Farm Adamant On Exit

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By CATHERINE DOLINSKI

cdolinski@tampatrib.com

Published: February 6, 2009

TALLAHASSEE - State Farm is planning to appeal the state's rejection of its rate filing in court - but don't mistake that for a sign that the company might stick around, company officials said Thursday.

Even if it wins its case, State Farm will leave Florida's property insurance market.
State Farm announced last week that it was dropping all of its million-plus property insurance policyholders in Florida after regulators rejected the company's filing for a 47 percent rate increase.

The company now plans an appeal of its rate rejection in district court.
State Farm spokesman Chris Neal laid to rest any speculation that a court victory might cancel the company's exit plan. The company, he said Thursday, is financially too precarious to remain in Florida at this point.

"There's no other option," Neal said. "To take any other course of action, actually, would be irresponsible."
State Farm is appealing the rate rejection because the company thinks the decision was incorrect and could set precedent disadvantageous to the company's other insurance interests, Neal said. State Farm has no plans to discontinue auto insurance coverage in Florida, he said.

On Tuesday, lawmakers asked company officials whether changing state insurance laws and regulations would change their plan.

But Neal said Thursday that the company may jump into discussions about reforming the state's property insurance market only because it could affect State Farm's remaining policyholders. Auto insurance customers will be on the hook for assessments if a major hurricane wipes out the state's Hurricane Catastrophe Fund.

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