Florida Insurance Commissioner Kevin McCarty announced that he has ordered State Farm Florida (State Farm) to issue credits or refunds totaling $120 million to current and former policyholders who did not apply for or who did not receive the Windstorm Loss Reduction Rating Plan discount for making their homes more resistant to wind damage.In addition, State Farm must pay a $1 million penalty to the Florida Insurance Regulatory Trust Fund.
The order follows a July notice to State Farm of an investigation by the Office into whether the company was properly implementing the mitigation discount program. As the result of an internal review, State Farm identified about 98,000 current or former policyholders to whom it will provide credits or refunds.
State Farm policyholders, who are entitled to the refunds will receive a notice from the company. They include policyholders who currently have, or did have, a homeowners, renters, condominium unit owners, apartment or condominium association policy.
Refunds will be credited to the renewal premium for all renewing policyholders entitled to the refund; or the company will issue a check. Former policyholders or those to whom State Farm has sent a nonrenewal notice prior to today will receive a check within 180 days. In addition, the refund must include 7 percent interest on the amount due to each policyholder until paid.
State Farm has 90 days to prepare the credit or refund process and 365 days for all credits or refunds to be issued. The company must then provide a signed certification, by a company officer, within 30 days of the date the last credit or refund is issued. The Office of Insurance Regulation will conduct a follow-up compliance audit in 12 months.
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1 comment:
Wow, what an enormous lump sum of money. State Farm is big but it seems like every couple years they are getting hit with some major amounts they have to pay. I wonder at what point it's going to cause them some real pain.
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