State Farm’s announcement to leave the Florida property insurance market has plenty of media attention. It is obvious that State Farm’s view of its actions is far different than that of its customers.

The views are extremely varied. One guest columnist categorized State Farm’s actions as a "divorce." She wrote that Charlie Crist is acting like a "scorned spouse" and that the State Farm agents are part of the "family" affected by the situation.

Florida’s newly appointed insurance consumer advocate, Sean Shaw, wrote a fairly optimistic piece in the Miami Herald. Significantly, he noted that "cheaper" insurance may be cheaper because it provides fewer benefits.

Best Wire ran a story, State Farm Agents, Policyholders "Hold Tight" Together. The star of this article is a State Farm agent, Craig Dewhurst. State Farm agents are very good salespeople. A few showed up at the last Citizens Mission Review Task Force Meeting and made public comments. They introduced themselves as "independent agents" which is legally true, but not entirely accurate because they are independent agents that can only sell State Farm policies. I am certain that State Farm lobbyists and public affairs types had them show up and introduce themselves in this semi-deceptive manner.

This article notes that "State Farm agents are independent contractors who only sell State Farm policies." Given how much control State Farm exerts over its agents, I am surprised Florida has not questioned the status of these agents as "independent contractors." State Farm changed the status of their agents years ago as another money saving mechanism–passing down selling costs to captive agents under the guise they are independent contractors.

Dewhurst claims to tell his customers that "we’re in this together." For what it is worth, I agree with him. The reason why we are in this together is largely the fault of his employer.

Dewhurst and 800 State Farm agents are fighting for economic survival. I imagine they will spin this crisis as the fault of the legislature, the Office of Insurance Regulation, and the Governor–anybody other than State Farm’s management in Bloomington. He admits this is what the agents are doing:

"They are mad at us at first but once we educate them on the facts, they want to write the governor and insurance commissioner." 

Dewhurst better hope his customers do not read the facts in this blog or the findings of the Administrative Law Judge that State Farm engages in "sham" economic transactions. Kevin McCarty and the Florida legislature should ask for the scripts State Farm has disseminated to it agents regarding these issues. State Farm has a legal obligation to be completely honest with its customers when explaining this situation.

I also indicated in an earlier post, What Is State Farm’s Agenda, that State Farm may have made the Florida announcement as leverage in other states. North Carolina is fighting an insurance rate crisis similar to Florida’s. Its legislators are contemplating passing laws capping or blocking significant rate increases against the recommendation of the North Carolina insurance commissioner.

What is State Farm’s position? An article quotes State Farm’s threatening position which uses the Florida announcement as proof it is not afraid of government:

"Russ Dubisky with State Farm Insurance says his company left Florida because it couldn’t get the increase it wanted…….’we’re confident, given the leadership of the department that we are going to move forward and come out of this with a resolution that’s beneficial to consumers and to insurers.’"

Maybe North Carolina legislators need to read some facts about State Farm as well.

Being in business with a bully means having knowing that the bully will take his ball home when the rules of the game are not to his liking. The bully will claim the reason he will not play is because the other players are not fair. While it is regretful, I agree with Sean Shaw, it is time to start looking for new players and help them get into the game of insurance.