Delaware’s insurance department announced it has fined State Farm Fire and Casualty Company a $150,000 penalty for failing to include in some of its non-renewal notices a written explanation of the specific reasons for non-renewal.
The insurer has also been ordered to review its protocols regarding the application of underwriting guidelines for Delaware’s coastal region and adjust the language included in non-renewal notices.
Following State Farm’s decision to not renew 509 of its more than 127,000 property policies in Delaware, the insurance department conducted a market conduct examination to ensure the insurer was acting within Delaware insurance laws and regulations related to property insurance under Title 18 Insurance Code, Chapter 41.
The examination determined there was no unfair discrimination in State Farm’s underwriting decisions. However, the report did find that the non-renewal notices did not contain all the statutorily required information for consumers.
Delaware regulators said State Farm Fire and Casualty Company has also been ordered to suspend coastal non-renewals for a period of 3 years (starting November 1, 2012) and include additional information on future coastal non-renewal notices.
Under an agreement between the Delaware insurance department and State Farm, the company will:
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