Florida Insurance Commissioner Kevin McCarty (McCarty) issued an Order on February 13, 2009 announcing that he has conditionally approved the withdrawal plan , which State Farm Florida Insurance Company’s (State Farm Florida) submitted on January 27, 2009, as reported here.
McCarty’s action permits State Farm Florida to withdraw from the Florida property insurance market, subject to several conditions. McCarty’s order requires State Farm Florida to:
- Surrender its Certificate of Authority within 30 days;
- Facilitate the orderly transition of policies from State Farm Florida to the private marketplace in a method directed by the Office and not place any of the policies with Citizens Insurance Company, Florida’s state sponsored insurer of last resort;
- Not interfere with its agents being hired by, or affiliated with, other private insurance companies and placing State Farm Florida policies directly with those other private insurance companies;
- Issue pro-rata premium refunds to any policyholder seeking to voluntarily cancel or non-renew a policy and not short-rate the return premium for any policy in any line, e.g., automobile, boat, or property insurance coverage, in an effort to minimize the market disruption and impact on all of its policyholders; and
- Consider all offers to buy or assume all or part of its business. A copy of any such offer must be provided to the Florida Office of Insurance Regulation (OIR) within 48 hours of its receipt.
According to McCarty, a number of private companies are interested in servicing existing State Farm Florida policyholders. Within 21 days from the date of McCarty’s Order, State Farm Florida must decide whether to abide by the Order or to file a petition at the OIR, requesting an administrative hearing.