Kevin McCarty, of the Florida Office of Insurance Regulation, is not going to get a holiday card from Ed Rust. McCarty issued an order that is an indictment of State Farm’s honesty.
Paragraph 9 of the Order states:
State Farm’s cited reasons in the Withdrawal Plan are both disingenuous and misleading to the Office and policyholders they seek to abandon. State Farm created its current “crisis” by failing to pursue the opportunities that were available to reduce its expenses and mitigate its decrease in premium volume. Instead, it chose to attempt to raise rates in order to reduce savings to its policyholders its mitigation discounts provided [sic.] and to seek a profit that was excessive and unreasonable in the current economic conditions while certifying that its rate filing reflected all premium savings that resulted from legislative enactments. State Farm’s actions raise serious questions regarding the fitness and trustworthiness of its officers and directors to engage in the business of insurance.
The findings reminded me of the Utah trial court’s order in Campbell vs State Farm. When a judge or official finds dishonesty in a major corporation’s business dealings, it is significant.
McCarty is allowing State Farm to leave Florida under specific conditions. State Farm has a right to challenge the order and the findings of fact, and, indeed, I expect it.
Our firm will certainly raise these factual findings every time we litigate against State Farm. State Farm’s Board of Directors should consider whether the management of State Farm should be changed.