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In Reply to: Burned by Stae Farm posted by B. Gersch on December 27, 1998 at 05:15:37:
STATE FARM UNFAIR TO CLIENTS, AGENTS, GROUP SAYS
WASHINGTON, Oct 29 (Reuters) - A group of current and former agents of the nation's largest insurance
firm on Friday called for congressional and state action to stop what they called unfair and discriminatory
practices by the company.
The group, who are independent contractors and not employees of the firm, charged that State Farm
Insurance Companies had engaged in such practices as selling fewer policies in low socio-economic
areas, and pulling business from high-risk areas.
The company posted a statement on its Web site denying the accusations and said most members of the
group were ``disgruntled former agents with a litigation-inspired motive.''
The group charged that the company had a surplus of $20 billion in 1991 and was ready for Hurricane
Andrew when it hit Florida the following year, but instead threatened to pull its operations from the state
when regulators prevented it from raising insurance rates on homes. In other areas, higher rates were
charged in the absence of additional risk while policy coverage was stripped.
Since 1992 ``the company has shifted from a business plan that held policyholders in high regard to a
new corporate philosphy that placed the value of their purses above those of their clients' claims,'' the
group said. It said agents were penalized financially when a tornado or hailstorm destroyed a number of
homes in their service area, and they were forced to limit the number of policies they could sell in high-risk
Harold Gray, State Farm regional vice president, said the accusations were ``unfounded.'' ``I know from my
26 years of experience that these broad allegations are false,'' Gray said. ``I would not work for a company
that stands for any of these practices.''
State Farm said almost all of the 40 members of the group had been involved in litigation with the
company for more than two years over a decision by the firm to terminate their contracts.