Insurance Price Controls Drive State Farm Out of Florida

DALLAS, Jan. 28 /PRNewswire-USNewswire/ -- It came as no surprise when State
Farm, Florida's largest writer of homeowners' insurance with nearly 1 million
policyholders, announced yesterday it will discontinue all Florida homeowners'
policies, thanks to the state's many encroachments into the property insurance
market.

"State Farm has finally decided to flee the state before Governor Crist's
'reforms' bankrupted it," said Dr. Lawrence A. Hunter, senior fellow with the
Institute for Policy Innovation (IPI).

"Florida's price controls have prevented insurance companies from charging
homeowners actuarially sound premiums that accurately reflect the risk of
storm damage policy holders are exposed to in the most hurricane-prone place
on the planet," said Hunter.

Almost immediately after instituting price controls on premiums in 2007,
Florida homeowners' insurance coverage began to dry up. Insurance companies
began fleeing the state, and firms that remained dropped thousands of
homeowners' policies that had suddenly become actuarially unsound under
Florida's price controls.

Rather than stifling competition with price controls and driving companies out
of the state, legislators should look to a competitive framework to encourage
market forces to decrease costs, maximize consumer benefits and enhance
companies' overall competitiveness.

"The outcome of this farce was never in doubt; it never is when the state
imposes price controls," said Hunter.

The Institute for Policy Innovation is a non-profit free market public policy
organization based in Dallas, Texas. Dr. Lawrence A. Hunter is available for
interview by contacting Erin Humiston at (972) 874-5139, or erin@ipi.org.

SOURCE Institute for Policy Innovation

Erin Humiston of the Institute for Policy Innovation, +1-972-874-5139,
erin@ipi.org