It's the content that matters...inside out



You are more in friendly hands, Yours!
Put Policy Ensurance by your side.

Rainy Day Go Away
© 2013-2015 APB

The Cat In Your Hat

holding your own

Catch wind of it

State Farm whistle-blowing agents


[ Follow Ups ] [ Post Followup ] [ Policyholder Awareness/Preparedness Forum ] [ FAQ ]

Posted by tonyb on December 13, 1999 at 02:57:02:

FORMER STATE FARM AGENTS: STATE FARM TERMINATES WHISTLE-BLOWING AGENTS; DC PRESS
CONFERENCE ON CONSUMER ABUSE SPURS AGENT FIRINGS

AUSTIN, Texas, Dec. 9 /PRNewswire/ -- The following was issued today by Larry Wilson, former State
Farm agent: State Farm Mutual Insurance Co. terminated its contracts with four insurance agents today for
publicly discussing a company-wide pattern of consumer abuse at America's largest insurance company.
Additional terminations are expected today.

These whistle-blower like terminations came on the same day a group of active and former agents
delivered a letter to insurance commissioners across the country informing them of State Farm's
violations of state insurance regulations, discriminatory policyholder selection criteria, and attempts to
fight the release of zip code data commonly used to determine redlining (see letter below).

A group of active and former State Farm agents earlier presented a letter to the United States Senate
Commerce Committee discussing State Farm's fraudulent use of medical utilization review companies
designed to lower payments to victims in auto accidents, fraudulent use of after-market auto parts, history
of misrepresenting life insurance policies as investment vehicles, overcharging on homeowner's
insurance and de facto redlining. A press conference took place in Washington DC on October 29, 1999
where terminated agents Mike Morgan, along with others, made presentations. The letter to the
Commerce Committee was made public at the press conference, which was signed by the other three
terminated agents.

Termination is the standard practice anytime an agent or employee questions deceptive or
anti-competitive behavior at State Farm," agent spokesman Patrick Woodson said. "The only people who
have breached any duty are the thugs at State Farm management. It is clear they will stop at nothing to
quiet any principled agents.

"Millions of Americans are being abused by State Farm and these agents were trying to make this
company do the right thing," Woodson said. "These agents have gone to court to stop these practices.
Now, they have gone public to stop continuing policyholder abuses. State Farm management should be
held personally accountable for their actions today and for years of disservice they've done State Farm's
policyholders."

State Farm cited the agents' participation in the 10/29/99 press conference as the reason for the
termination proceedings. Agents terminated were: -- Michael Morgan of Dayton, OH. (937) 434-6673; --
Lee Saghirian of Millersville, MD. (410)266-7920; -- Clifford Lykke of Houston, TX. (281) 444-1520; -- Alan
Perkins of Tacoma, WA. (253) 537-1444;

December 9, 1999

Larry Wilson

2402 North Shields Drive

Austin, TX 78727

Director Nathaniel S. Shapo

Illinois Department of Insurance

320 West Washington St., 4th Floor

Springfield, IL 62767-0001

RE: State Farm Insurance Co. Pattern of Insurance Abuse

Dear Director Shapo:

We are writing to call your attention to a national pattern of insurance abuse directed by the management
of State Farm Insurance Companies towards its sixty million policyholders throughout the United States.

The signators on this letter are current or former State Farm agents.Beginning in the early 1990's, State
Farm made a fundamental shift in its management strategy, which has created a company-wide pattern of
fraud and abuse. For our part, we have filed litigation in California to stop these abusive practices to
protect both policyholder and agent.

State Farm knowingly engaged in policies ending coverage, creating de facto discrimination, employing
fraudulent medical utilization review companies and creating other practices to reduce risk and
simultaneously enhance profits. These policies violate a number of state insurance regulations and may
well run afoul of your state's regulations.

First, we have direct evidence of a corporate practice called "managed growth" or "exposure
management," which forces State Farm agents to engage in discriminatory declinations unrelated to
underwriting criteria. These programs force their agents to become discriminatory weapons to control
profitability in a number of states.

Second, we can show how State Farm put an insurance to value mechanism in place to extract additional
premiums from property and casualty policyholders without increasing the commensurate risk to the
company.

Third, we have direct knowledge of how State Farm institutes policies directly opposed to the public's
interest, including the acceptance and declining of policies through "desirability profiles," unfairly declining
coverage by tying quotas to individual agent profitability, and creating an unrelenting pressure on its agent
force to sell life insurance.

Since State Farm's management shift, this company has amassed record profits. In its first seventy years
of operation (1922-1992) State Farm built an $18 billion surplus. Since 1992, which has included
Hurricane Andrew in Florida and the Northridge earthquake in California, the surplus has increased to
more than $60 billion. In the last seven years of operation, company coffers have more than tripled, while
many consumers have seen eroding coverage and/or higher insurance rates. There is no doubt the
consumer is being unfairly harmed by State Farm's policies.

Property and casualty policies in California and Florida are good examples of this trend. In those states,
State run insurance programs assumed much of the risk after Hurricane Andrew in 1992 and the
Northridge earthquake in 1994. Despite the fact that company officials had access to an $18 billion
surplus which California and Florida policyholders helped create, State Farm threatened to quit writing
new property and casualty policies in those states until government-sponsored entities like the California
Earthquake authority (CEA) and the Florida Residential Property Casualty Joint Underwriting Association
(JUA) were set up to assume all or most of the market risk. What resulted for consumers who continued
with State Farm were considerably higher rates and worsened coverage. Even today, State Farm offers no
earthquake coverage to California property and casualty policyholders. It is another example of how this
company has built higher profits on the backs of the policyholders.

The visible symptoms of the company's practices are just beginning to become apparent. Years of abuse
have put a handful of State Farm's practices under the legal microscope. In courts in 1999, State Farm
settled or was forced to pay more than $1.5 billion. A jury found State Farm committed fraud in their use of
after market car-parts and a judge in Oregon wrote that State Farm engaged in a fraudulent scheme to
limit payments to auto accident victims through its use of phony medical utilization review companies.

Another alarming trend is the caustic struggle over trade secrets. State Farm is fighting attempts in Texas
and California to release coverage data by zip code. As you are aware, that data can be mined to
determine if State Farm actively engages in redlining particular areas.

The company uses similar "trade secret" arguments in its intimidation attempts to keep its principled
agents from even speaking to former customers once they have left State Farm. There is an on-going
case in San Francisco where State Farm is suing two agents the company terminated for disagreeing
with State Farm policies and tactics. The suit alleges these two individuals are engaging in "unfair
competition" under the guise of "trade secrets" of the company when in fact the agents are simply
maintaining a visible presence in the marketplace and offering former policyholders an alternative.

Ferreting out these problems is difficult because State Farm has instituted a policy of intimidating and
threatening whistle blowers. Members of our group have been threatened with termination for speaking
out against the company and highlighting their unethical practices.

We are writing to you in the hope that you will look deeply at State Farm's practices and make an
independent verification that policyholders in your state are not being harmed by these abuses. We would
welcome the opportunity to share our knowledge with you and are available any time to discuss these
matters.

You contact any of us through Patrick Woodson at (512) 474-7514 or through our website at
http://www.SFAGENTSWHOCARE.org.

Sincerely,

Larry Wilson

For: Art Appling, Santa Rosa, CA. Paul Quilici, Reno, NV.

Bill Bernard, Carmichael, CA Lee Saghirian, Millersville, MD

Dan Brumfield, Fair Oaks, CA Jo Ann Searcy, Oxnard, CA

Jacob Castroll, Studio City, CA Tana Schultz, California, MD.

Lyle Chambers, Nampa, ID. Rosanne Smith, Pleasant Grove, UT.

Bill Cornelison, Fresno, CA Anthony Vito, Tucson, AZ.

Marilyn Cusimano, San Jose, CA Terry Walker, Sebastopol, CA

Larry Daveggio, Santa Rosa, CA Verne Walton Agency, San Jose, CA

Leonard Doctor, Northridge, CA John Wier, Crescent City, CA

Dennis Farrell, Bermuda Dunes, CA Larry Wilson, Austin, TX

Jerry Flanders, West Palm Beach, FL.

Andy Gaines, Omaha, NE.

Ray Gilmore, Livermore, CA

Mike Hartman, West Palm Beach, FL.

Paul Julian, Palm Desert, CA

Joseph J. Kelly, Joplin, MO.

Bob Kennedy, Apple Valley, CA

Chuck Lewis, Littleton,CO.

Fred Love, Granite Bay, CA

Clifford Lykke, Houston, TX.

Michael Morgan, Dayton, OH.

Alan Perkins, Tacoma, WA

Doug Perry, Auburn, CA

Matt Pickett Jr., San Jose, CA

Dale Pitney Jr., Scottsdale, AZ.

Richard L. Pyorre, Ft. Bragg, CA

How to get WHAT YOU DESERVE (Excerpt from the book, "Policy Ensurance")

Policyholder Resources



Follow Ups:



Post a Followup

Name:
E-Mail:

Subject:

Comments:

Optional Link URL:
Link Title:
Optional Image URL:

Policyholder Resources


[ Follow Ups ] [ Post Followup ] [ Policyholder Awareness/Preparedness Forum ] [ FAQ ]
About DisasterPrepared.net

© 1991-2011 Antone P. Braga