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You all may remember a year ago State Farm asked the State of Florida for a 67% rate increase for their homeowner’s insurance. When the Insurance Regulators denied their request, State Farm announced they would pull out of Florida, citing losses of $20 million a month. They predicted that with these losses they would be insolvent by 2011. At the time, Governor Charlie Crist was quoted as saying he didn’t care if the State’s largest insurer pulled out, saying Floridians would be better off without them.

Now I’m not an actuary or a math wizard, but it’s a little hard to believe that this multibillion dollar company is having a tough time making ends meet. Especially when we have had no hurricanes in the past three years, which allowed State Farm to pay out only 35 cents in claims for every dollar in premiums they earned. Maybe it had something to do with that pesky “reinsurance” that State Farm Florida buys from its’ parent company for billions of dollars more than it needs to remain solvent in the event a “big one” hits.

But I guess the folks in Tallahassee that regulate insurance companies don’t like to be bothered by all those numbers and actuarial things. This past Wednesday they caved in to the big insurer and gave them what they wanted, a rate hike for all of the people fortunate enough to still be State Farm policyholders. But it was only a paltry 14.8%, hopefully enough for the Good Neighbor people to struggle through a few more years. Oh, by the way, as part of the deal, they are allowed to drop another 125,000 policy holders. I wonder which areas they will decide to drop, surely not those folks along the coast where they have any hurricane exposure. And, I almost forgot, they also get to cancel all the discounts they promised for people who “hardened” their homes from the weather with expensive new windows and shutters, discounts that the Farm had lobbied for only years before.

Now for the really bad news. There is a bill pending in the State Legislature (don’t call it the State Farm Bill) that would allow insurers to charge whatever they want, without any regulation. That’s right. And you may not know it but a similar bill passed the insurance friendly legislature last year, fortunately vetoed by Governor Crist. Do you think he’ll veto it again this year now that he is running for Congress?