On Nov. 16, 2009, the commissioner of the Texas Department of Insurance (TDI) ordered State Farm Lloyds to pay $310 million in premium refunds and interest to its Texas homeowners insurance customers as part of an ongoing legal dispute between TDI and State Farm Lloyds that dates back to 2003.
State Farm Lloyds filed a request for rehearing on this matter with TDI on November 25 and will file a petition to appeal the order in state district court on November 30, 2009. State Farm disagrees with the order and has taken these practical steps to allow more time to thoroughly review the impact of this order.
Decisions affecting our company’s customers and our company cannot be made without fully evaluating the consequences. The best outcome would be a resolution that ensures State Farm can best serve the future needs of our customers, our company, and the Texas insurance marketplace.
The financial impact of this order on State Farm Lloyds is comparable to the financial strain caused by Hurricane Ike, the third most destructive hurricane to ever make landfall in the U.S. This decision not only challenges State Farm financially, it creates an unstable environment for consumers and the insurance industry. The commissioner’s order could have significant impacts on current and future Texas customers, and on State Farm Lloyds.
State Farm’s rates are, and always have been, competitive and reflect the risks of the Texas market. Ultimately, State Farm’s objective is to ensure that we can continue to fulfill our commitment to Texans who rely on us to keep our promises and be there when the unexpected happens.
Homeowners Rate Dispute – Backgrounder
The Facts About State Farm’s Rates
The Health of the Texas Insurance Marketplace