Insurance Company Fraud

Not very many Texas insurance lawyers really understand what went on in the Farmers fraud case several years ago. The public in general did not know what was going on, only that Farmers was refusing to renew home- owners policy. This was causing the public to be upset. The whole story isn’t that difficult but it is essentially over.
Texas Watch ran an article in April 2014, titled “Judge Concerned About Sweetheart Deal For Farmers Insurance” and the story does not discuss the underlying facts that gave rise to what was discovered but it does talk about some of the repercussions. Here is what the article tells us.
A Texas district court judge refused to allow a sweetheart deal between Farmers Insurance and the State of Texas to move forward today. At a hearing in Judge Scott Jenkins‘ court, lawyers for Farmer Insurance and Attorney General Greg Abbott’s office argued in favor of a deal that allows the insurance giant to avoid paying interest on millions of dollars in excessive premiums.
“This was a sweetheart deal in 2002 and it is still a sweetheart deal,” said Alex Winslow, executive director of the citizen advocacy group Texas Watch.
In 2002, Greg Abbott, then a candidate for Attorney General speaking about Farmers’ nefarious practices, said he would hold “accountable any company that bilks consumers out of their hard earned money.”
“That was then, this is now,” said Winslow. “Today, Greg Abbott and Farmers Insurance are linked arm-in-arm to push this bad deal through. Why isn’t Greg Abbott keeping his promise to Texas policyholders? He should put Texas homeowners first by forcing Farmers to pay back every penny it owes plus interest.”
At today’s hearing, Judge Jenkins raised concerns that portions of the settlement were too favorable to the insurance giant at the expense of its customers. He asked why the settlement did not require Farmers to pay any interest on the amount of overcharges. Additionally, he was concerned about potential conflicts amongst the parties and that a Farmers entity comprised of its own policyholders – rather than Farmers’ corporate entity – would be responsible for payment of the settlement.
The current dispute stems from litigation that began over a decade ago over Farmers allegedly unfair home insurance practices. Attorneys representing policyholders objected to the proposed settlement, raising questions about how the settlement was structured and how Farmers customers would be notified and repaid.

That is the article. What is not discussed and is very interesting are the facts that lead to this point. Hardly anybody recalls this but Farmers was in a lot of trouble. They agreed to pay large fines rather than risk some of it’s higher ups bring criminally prosecuted. You should find someone who knows about what actually occurred and get them to tell you the story. It is unbelievable.

Contact Information