State Farm to pay on charges

December 05, 2002
Minnesota regulators cracked down on what they called illegal and unethical business practices by State Farm Insurance on Wednesday, fining the state's largest home and auto insurer $775,000 and requiring the Bloomington, Ill.-based company to change the way it does business in the state.
     State Farm did not admit wrongdoing, but agreed to settle three separate allegations brought by the state Department of Commerce, and to change some of its practices. One of the settlements is expected to reduce premiums for almost 150,000 State Farm homeowners insurance customers across the state.
     The Commerce Department alleged that State Farm pressured medical practitioners to change opinions about injuries suffered in auto accidents to reduce the cost of paying claims. The agency also alleged State Farm unfairly slapped a surcharge on homeowners insurance policies for any home over 40 years old. The Commerce Department further alleged that State Farm underpaid companies that replace auto glass.