Florida Investigates Second Insurance Co.

Florida’s Office of Insurance Regulation has served subpoenas on two insurance companies. State Farm Florida (and its parent corporation) and Cincinnati Insurance and Cincinnati Indemnity (subsidiaries of Cincinnati Financial Corp.). According to the Florida Deputy Insurance Commissioner, the agency wants to find out if the insurance companies improperly worked with financial rating firms, trade organizations and catastrophe modeling companies to fix rates or interfere with the Florida insurance market. Insurance companies are exempt from Federal anti-trust laws in order to allow them to share statistical information through trade organizations. However, the exemptions only go so far. It is a violation of antitrust laws for insurance companies to get together to decide how they can excercise restraint of trade, pricing or business practices.