The "Farmers Insurance News-Alert" website is dedicated to providing the consumer and general public with detailed information concerning the Farmers Insurance Group. This includes fraud reports, consumer complaints, lawsuit's and other legal actions taken against this company. All information contained herein is for educational purposes only. Original sources, when known are sited.
|Saturday, December 24, 1994
Garamendi Tells Farmers to Pay $183.5 Million; Rebate: Commissioner also orders
insurer to stop offering earthquake insurance with 20% and 25% deductibles.;
By: THOMAS S. MULLIGAN
"We disagree entirely that our action was illegal, and we will immediately seek a stay from (Los Angeles) Superior Court," he said.
Farmers also contends that it owes no rebates under Proposition 103 and will fight the rebate order, as have such other large insurers as State Farm Mutual Automobile Insurance Co. and 20th Century Insurance Co. State Farm has hearings on its dispute scheduled with the Insurance Department early next year.
In August, in a legal challenge by 20th Century, the California Supreme Court upheld
Garamendi's method of implementing Proposition 103. Facing payment of $120 million in
rebates, 20th Century obtained a court
The proposed $183.5-million rebate, including 10% annual interest dating back to May,
1989, is the third highest of the 42 that Garamendi has ordered so far, reflecting
Farmers' No. 3 position in the California
However, few of the companies that have settled their Proposition 103 liability have paid anything close to the amount they were ordered. No. 2 Allstate Insurance Co., for example, last year agreed to pay $110 million of the $243.6 million it had originally been assessed in October, 1991.
"Clearly, Garamendi is playing politics with these numbers, since he had offered our member companies a substantially lower settlement number" in negotiations with Farmers representatives, Millen said.
He declined to give the number, but sources close to the negotiations said that under one proposal on the table before the talks broke down, Garamendi would have granted Farmers most of the earthquake insurance rate increase it is seeking in exchange for Farmers agreeing to a substantial Proposition 103 rebate.
Garamendi, who leaves office Jan. 2, considers his defense of Proposition 103 as one of his administration's strongest accomplishments.
Farmers applied for an earthquake rate increase averaging 174% statewide. The application is scheduled for hearings in January, under incoming Commissioner Charles (Chuck) Quackenbush.
In the meantime, Farmers, like most other large insurers, continues to maintain a
moratorium on writing new homeowners and earthquake insurance in California, fearing
additional earthquake exposure.
|Attention! All information contained herein is for educational purposes only. No copyright infringement is intended by any material on these pages. The copyrights of the whole multimedia content on these pages are belonging to their originators, authors, creators... etc. All original content is the property of it's originators. Copyrighted material has been used for non-commercial purposes only. This website is best viewed with your monitor resolution set to 800x600 and your video mode set to true color.|