A state court has ruled in favor of State Farm’s effort to make secret basic information available to the public for years on how many customers it has — or is dropping, Florida officials said Wednesday.
“I am disappointed in the outcome of today’s ruling and believe this weakens the ability for consumers to access information in this state,” said Florida Insurance Commissioner Kevin M. McCarty. “However, the Office respects the court’s decision and will evaluate its available options to determine any further action.”
A written ruling from the Leon County Circuit Court case was not immediately available, but state officials said the decision was in favor of the company. State Farm had no immediate statement, but has argued in court it should be allowed to declare the information a trade secret to avoid tipping off competitors to strategic marketing efforts.
“Disappointing is putting it mildly,” said Barbara Petersen, president of the First Amendment Foundation. “This is a huge blow.”
If the ruling stands unchallenged, there may be nothing to stop other property insurers from going dark on information submitted to the state’s Quarterly and Supplemental Reporting System (QUASR). The system shows, quarter by quarter, how many policies a company has statewide and in individual counties, and how many policies it has canceled or not renewed.
“To cut off access to critically important information — information that has been publicly available for years — about the insurance industry leaves the public in the dark about an issue that is of critical concern to property owners across the state,” Petersen said. “I hope the Office of Insurance Regulation will appeal the ruling.”
As the Palm Beach Post reported, State Farm contended it needed higher rates than it was getting and shed more than 464,000 property insurance customers between the first quarter of 2009 and the end of 2013 — and reductions continued into last year. That was well over half its more than 850,000 customers from five years ago. The expulsions pushed hundreds of thousands of Florida residents into other carriers such as state-run insurer Citizens, helping to swell it to a high of 1.5 million customers.
Insurance advertising often makes heavy use of themes involving trust, dependability, good hands or good neighborliness, so perceptions of commitment to a state or local market can matter — and even affect other business such as car insurance.
West Palm Beach resident James Savage said he was a State Farm customer for 36 years and never filed a storm-related claim, yet the company dropped him.
“State Farm should be banned from the state or at least from the South Florida area from selling either auto, property insurance and or investments,” Savage said last year. “Is it possible to hate State Farm? You bet!”
State Farm lost a similar attempt in court in 2007. In 2014, it declared its information a trade secret, arguing access to the “specific level of detail that is included in the report” gives rivals “valuable information to use to undermine State Farm’s marketing advantages.” It went to court to defend that position.
Florida Chief Financial Officer Jeff Atwater of North Palm Beach was not available for comment Wednesday, but he spoke out for transparency in 2014.
“The CFO supports the longstanding practice of being transparent with this information, which has been valuable in the assessment of Florida’s insurance market as well as in the establishment of good public policy for consumers and insurers alike,” an Atwater spokesman said. “Without a clear argument as to why this data could be considered a trade secret, the rule of transparency should apply.”