On Dec. 3 of last year, the Supreme Court reversed the certification, asserting the trial court failed to engage in the required rigorous analysis to determine if the class should be certified.

In its ruling, the High Court agreed with State Farm that before certifying the class, the court should have determined whether Texas or Illinois law should govern the claim.

It also asserted there are irreconcilable differences between class members, specifically between current and former policyholders. Current policyholders, State Farm said, have an interest in the company maintaining adequate surplus, as opposed to former policyholders whose interest is in receiving a dividend or refund.

Peter Bisbecos, director of legal and regulatory affairs for the National Association of Mutual Insurance Companies, said one critical issue for his organization was the court's holding that, "if no class members can state a viable claim, disparities issues should be resolved by the trial court before certification is considered."

This referred to State Farm's argument that the plaintiffs don't have a valid cause of action because the decision of whether and when to issue a dividend is governed by Illinois law and left to the discretion of board members.

Mr. Bisbecos said it appears that the trial court will have to rule on the critical issue of whether Texas residents have a cause of action under Texas law against a company domiciled in and operating under Illinois law.

"It is stunning that a court would certify a class, granting plaintiffs enormous leverage, when that same court has not decided whether the people in that class even have a valid claim," he said.