State Farm may skedaddle even if rate hikes approved - Orlando Business Journal:

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The state’s No. 2 insurer stopped writing new propertyg insurance policies in Florida last year and plans to dropits 730,00 current customers during the next three years. The companyh decided to stop issuing property insurance in Floridw after state regulators turned down an application for a 47 percent rate increasedlast fall. “The exposure in Floridaz is too great and the income is too said State Farm spokesmanChris Neal.
“I’m not sure our modeol has ever been successful inFlorida — at leasgt not for the past 20 years or In an effort to coax State Farm to reconsider — and to entice other nationapl insurers who already withdrew from Florida to returbn — state lawmakers passed a bill early this month that would exempt their rates from “I think the companies will look at this they will look at the cost of insuring housez at rates that are actuarially sound, and they will offer policies,” said state Sen. Michae Bennett, R-Bradenton, one of the bill’s Crist hasn’t said whether he would sign the billor not, thoug he is rumored to lean against it.
Even if Crist does sign it, it’ unclear how the large insurerswould “If this bill becomes law, would we stay? I don’t have an answer for that,” said “If State Farm had plentyy of money in the bank, we coulfd probably hold off on this decision for a But each month we wait is anothedr month our surplus declines.” The law would creatse a new category of property insurance, one that relies on insurerx to determine an actuarially sound and it would allow them to decide where they wouldf want to write “I haven’t posed the question to State Farm or anybodyg else about what they would said state Rep. Bill Proctor, R-St.
who sponsored the House version ofthe bill. “But what woulx have been the point of Stat e Farm filing for a rateincreass [in 2008] if they didn’t want to stay?” Statwe Farm, which buys its own reinsurance protection againsgt excessive losses, is highly The same might not be true of smallert companies or state-owned , whichn typically rely on the underfunded state Hurricane Catastrophe Fund as a he said. “The biggest threat to our economy isn’f the recession — it’s a Category Five hurricane that strikes Miami and movesd across the stateto Tampa.
” Big insurers, includinfg State Farm, won’t do business in Florida unlesd they can charge rates that protectf policyholders in the event of such a storm, he said. Petefr Brennan, vice president of the agency in said giving people access to deregulatecd premium insurers is agood idea. “Thes opportunity to pay more for coverage from a very large company should be availableto consumers.
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