A request by state officials to let 826 captive agents of State Farm Florida represent other insurance companies is being rejected by the Bloomington, Ind.-based insurer.
Alex Sink, CFO for the State of Florida, raised the suggestion in a letter to State Farm Florida President Jim Thompson. “I urge you to immediately allow your agents to obtain insurance appointments from other property companies,” Sink wrote. “Your loyal insurance consumers deserve the opportunity to keep their relationships with their State Farm agent and be placed with the property insurance company that best meets their insurance needs.”
Sink’s letter was precipitated by State Farm’s January 27 announcement that it would abandon the Florida property/casualty market. This news followed close on the heels of decision by the State of Florida’s Office of Insurance to deny State Farm Florida a 47.1% rate increase. The company said the denial of the rate increase imperiled its financial condition.
“Faced with steeply declining resources to cover future claims and expenses, State Farm Florida has little choice,” Thompson said in a statement. “State Farm Florida is a private company and must have adequate capital to ensure financial stability. And it is our responsibility to our policyholders to provide a sound financial framework for the coverages we offer.”
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