With insurers pulling out of states such as Florida and California, or refusing to underwrite new policies in others, Georgia insurance commissioner John F. King revealed that Farmers Insurance has canceled tens of thousands of nonrenewal notifications that would have gone into force next month. The insurance commissioner’s office stated that it has contacted Farmers to discover how many customers were affected, but that because all nonrenewal notices had been reversed, “no policyholders are impacted at this time.”
“It was brought to our attention this week that Farmers Insurance had alerted their customers that they would be non-renewing any homeowner policies on homes with roofs over 15 years old in blatant violation of Georgia law,” said Commissioner King in a press release. “My office immediately took action, ordering Farmers to reverse course and rescind these scheduled non-renewals. I am extremely disappointed with the actions of Farmers and am contemplating further disciplinary actions at this time.”
The commissioner’s office confirmed to PC360 via email that “this is the first time we’ve come across an insurer trying to make a broad change to underwriting guidelines for a number of existing policyholders at once. Our office has a broad range of actions we can take when an insurer violates state law. These can range from a monetary penalty to pulling their license to do business in the state.”
Insurance is regulated at the state level across the country, and according to new guidelines under Georgia law, insurers are not allowed to non-renew existing customers without incurring significant fines. Insurers are permitted to change their underwriting guidelines as needed for new business.
Farmers has already stated that it will end property, automotive and umbrella policies in Florida and has taken similar steps toward slowing down growth in California.