Information from the Office of Insurance Regulation re Statement from Insurance Commissioner McCarty Regarding Action on State Farm Florida Insurance Company Rate Request 7/18/06

Please find below news from the Florida Office of Insurance Regulation. Should you have any questions or concerns, please do not hesitate to contact this office.

Regards,

Fred E. Karlinsky

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STATEMENT FROM INSURANCE COMMISSIONER KEVIN MCCARTY REGARDING ACTION ON STATE FARM FLORIDA INSURANCE COMPANY RATE REQUEST

TALLAHASSEE (July 18, 2006) � On May 18, 2006 State Farm Florida Insurance Company (State Farm) submitted two rate filings requesting a combined effective rate of 79 percent to the Florida Office of Insurance Regulation (Office). The Office informed State Farm that the rate was unsupported and informed the company of its intention to disapprove the filings.

Subsequently, State Farm withdrew one of the filings and said it would amend the other. State Farm has amended that filing and is now requesting a statewide average rate hike of 52.7 percent. This amended rate agrees with the indication of the Office and was confirmed when company data was submitted to the public hurricane model. Insurance Commissioner Kevin McCarty released the following statement regarding today�s development:

“While this approved rate is sharply less than what had originally been filed it is still substantial, and I am deeply concerned about the effect it will have on the household budgets of Floridians, particularly those with low incomes or on fixed incomes.

“One of the foremost mandates of my job requires me to approve rate requests that are justified and that will provide the company the ability to pay the claims of Floridians whose homes are damaged or destroyed due to catastrophic storms, and I am confident the rate we are approving is justified under law. But again, I regret the tough economic choices policyholders may have to make to adequately insure their property.”