A Texas judge has upheld an order against State Farm to refund $310 million to policyholders for alleged excessive rates from as far back as 2003.
The order was issued by Texas Insurance Commissioner Mike Geeslin in November 2009. Since then, the insurer and regulator have fought in court over the order.
The commissioner's office confirms that Travis County District Court Judge Tim Sulak upheld the order. State Farm will be responsible for the refunds, plus interest, says Jerry Hagins, spokesman at the Texas Dept. of Insurance.
"This is a major step toward bringing this issue to a conclusion," says Geeslin in an e-mail.
When the order was first released, State Farm likened the impact to the losses it incurred from Hurricane Ike in 2008. The insurer had been sparring with Geeslin over rate hikes State Farm sought.
Texas has a file-and-use rating system.
State Farm, the state's largest writer of homeowners insurance, has insisted it owes nothing—that its rates were never excessive.
"The judge thought the commissioner had substantial evidence," counters Hagins.
State Farm spokesman Kevin Davis says the insurer will appeal the decision and remains confident Geeslin's order will be reversed.
The company's rates "are and always have been fair and competitive," says Davis.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
