FORT LAUDERDALE – A three-judge panel is slated to hear
appeal arguments just after the new year in the simmering “trade secrets”
dispute between State Farm Florida and state insurance regulators.
At issue is a recent verdict rendered by
2nd Judicial Circuit Court Judge James Hankinson where he issued an injunction
blocking the public release of information pertaining to the insurance behemoth’s
Recently appointed state insurance
commissioner David Altmaier immediately challenged that ruling, setting the
stage for appeal proceedings to commence on Jan. 19.
During the initial proceedings,
attorneys for State Farm successfully argued that the information in question
should be considered part of the company’s inner-workings and thus safeguarded
from all public disclosure.
What’s at stake is the public release of
quarterly reports filed and kept by State Farm that reveal such findings as
the number of policies the company has on record at the end of each month, the
total number canceled and not renewed and the number of new policies written.
For the last 20-plus years, insurers across
the state have been required to make such information available on a quarterly
basis. From there, it has been made publicly stored in a database known as Quarterly
Supplemental Report (QUSAR).
insurance advocates use the data stored in the system to advise customers and
agents about which providers are best serving what areas of the region.
“State Farm is being a bad actor in all
this,” Jay Neal, Florida Association for Insurance Reform (FAIR) president and
CEO, told the Florida Record. “Once
they became vulnerable to criticism for trying to change legislation without
writing any new posts, they invoked trade secret policy.”
Hankinson’s verdict, state
regulators contend the judge erroneously based his decision “solely on the
testimony of State Farm’s employees,” a development they characterize as a gross
misapplication of state law, according to the brief.
If the verdict is allowed to stand,
state officials contend it will allow State Farm and every other property
insurer the right to hide such critical information as the number of customers
it has and the number it is has dropped for whatever reason.
Neal sees such a development as an
“The public has a right to know,” he said. “It’s part of the
State Farm once reigned as Florida’s
largest property insurer, but in recent times the company has moved to dump
roughly half a million homeowner policies, creating what has amounted to a
crisis-situation for the state.
As recently as two years ago, State Farm
officials pledged the company was set to re-enter the market, but insisted it
needed to be strategic in doing so and keeping customer count information out
of the hands of potential competitors was part of the plan.
At least part of that contention runs
counter to the findings of a recent investigation which concluded that since
making its writing new business claims in 2014 the company has dropped about
40,000 patrons, or roughly one in 10 of its remaining customers.
Currently, the company is the only major
insurance provider in the state not to share information in the state run
Meanwhile, State Farm spokesman Michal
Bower noted that even as the company seeks to keep all the disputed data
in-house, it is still reporting all the information to the state in keeping
with the regulatory process, the Sun Sentinel reports.
As for all the pending litigation, Neal
added, “I think the argument is strong for appeal. I will leave to the
attorneys how best to advocate all the part of policy holders.”