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State Regulators, State Farm Tangle Over Insurance Policy Information
May 24, 2016
Insurance regulators are preparing for an appeals-court battle with State Farm Florida after a circuit judge blocked the release of information about the company’s property-insurance policies.
The Florida Office of Insurance Regulation filed a notice of appeal last week after Leon County Circuit Judge James Hankinson issued an injunction against the release of the information, which State Farm argued was a “trade secret” protected from public disclosure.
The dispute involves quarterly reports that property insurers file with the state providing information, broken down by county, about issues such as the number of policies in place at the end of each month, the total number of policies canceled, the total number of policies that are not renewed and the number of new policies written.
Regulators have long collected the information and made it publicly available, but State Farm filed a lawsuit in 2014 contending that the information is a trade secret under state law. Hankinson held a trial in March and issued a written order May 2 that said the information, known as a “Quarterly Supplemental Report,” or QUASR, is exempt from disclosure.
Hankinson wrote that a disputed issue is “whether QUASR data has value. The court finds that there is value to the QUASR data. … Accordingly, plaintiff (State Farm) has shown, by a preponderance of the evidence, that the QUASR data meets the definition of trade secret.”
As is common, the notice of appeal filed Thursday in the 1st District Court of Appeal does not detail the arguments that the Office of Insurance Regulation will pursue in trying to overturn Hankinson’s ruling.
But in a memorandum filed March 4 in circuit court, the Office of Insurance Regulation said it uses the data to create a “comprehensive report” based on submissions from all insurers.
“The Office (of Insurance Regulation) provides this report to the executive and legislative branches of government to inform them of overall business volumes, as well as risk exposure (i.e. wind) on both a statewide and county basis,” the document said. “The identification of market share and concentration of risk is vital information for public and governmental use — particularly in the event of a hurricane or other storm event. This information is utilized by individual consumers, press, other states and governmental bodies.”
But State Farm, in a memorandum also filed March 4, said it does not dispute that regulators should have the data but that the Office of Insurance Regulation “should not publish the data on its website and give competitors unfettered access to State Farm’s QUASR data. Moreover, there is no legislation that requires OIR to publicly disclose this data.”
“State Farm’s QUASR data possess independent economic value which provides an advantage to those who do not have it,” the company document said. “Specifically, the QUASR data reflects certain detailed information about State Farm at the county level. If a competitor was looking to write or market business in a certain county, that competitor would want to capture information related to other companies that write business in that county based on policy count and premiums written. Such information may be gleaned from reviewing State Farm’s QUASR.”
In its memorandum, however, the Office of Insurance Regulation disputed State Farm’s arguments about other insurers using the data.
“Plaintiff’s (State Farm’s) criteria for writing its business and rating, like most, if not all insurers, is based not on counties, but instead on numerous factors that must be evaluated and assessed,” the document said. “Other insurers determine risks in a manner completely different than plaintiff’s.”
NorthEscambia.com file photo, click to enlarge.
Comments
4 Responses to “State Regulators, State Farm Tangle Over Insurance Policy Information”
Way back when, I had a State Farm auto policy. Got one simple speeding ticket and they dropped me like a hot potato.
This is also the same company that refused to pay homeowner claims on the Mississippi coast after hurricane Katrina, based on flawed science.
Their claim that because disclosure of data “is not required”, their data should not be disclosed, is ludicrous. Insurance companies have way too much power as it is.
@fisherman:
My brother claimed a cracked windshield & they canceled his policy. I can’t go by anything else, thanks.
@Mike I have had State Farm for over 25 years and have filed several claims for windshield damage (4) total over 12 year period and I still have State Farm.
Watch out on having an auto claim after first signing up with SF, they will cancel your policy, even for something simple like a cracked windshield on a full coverage policy. Like a good neighbor, they won’t be there.