Wednesday, January 09, 2008

Louisiana Attorney General Files Suit Against Farmers Insurance

Louisiana Attorney General Charles C. Foti, Jr. announced today that his office has filed suit against Farmers Insurance and other insurance companies. The petition, filed in New Orleans Civil District Court, alleges Farmers Insurance et all participated in an on-going scheme to rig the value of property damage claims paid to their insureds. "They allegedly used damage-estimating software programs to engage in horizontal price-fixing as well. The combination allegedly artificially held down property damage claim payouts with the intended goal of increasing the profits of each company involved."

“This alleged scheme gave insurers an unjust advantage over policy holders, which they used before, during and after one of the greatest disasters this country has ever suffered, by reaping huge profits from the misfortunes of persons whom they pledged to protect from the risk of loss. I believe this unjust advantage resulted in the unjust enrichment of themselves to the detriment of the state, policy holders, and commerce in Louisiana,” stated Attorney General Foti.

Farmers Insurance v. Louisiana (Xactware/Monopoly Lawsuit)

Thursday, January 03, 2008

Farmers Insurance Agent Charged with Theft and Forgery

Insurance agent arrested in fraud investigation

November 08, 2007 14:06PM

Kenneth Edward Reinking
BEAVERTON -- An insurance agent who is said to be the focal point of a state investigation of fraud, forgery and theft involving his now-closed Eugene office has been arrested at his home near Beaverton, according to the Oregon State Police.

Kenneth Edward Reinking, 51, was arrested Monday on a Linn County warrant charging him with first-degree theft, three counts of first-degree forgery and a single count of negotiating a bad check, said Lt. Gregg Hastings, an OSP spokesman.

Reinking was arrested by the Washington County Sheriff's Office and held in the Washington County Jail but has been released. Hastings said Reinking is scheduled to appear in Linn County Circuit Court on Nov. 28.

The investigation of Reinking began in late July, Hastings said, when OSP detectives joined the state Insurance Division and served a search warrant at his north Eugene company, Reinking Insurance.

The business has since closed.

Hastings said Reinking is being prosecuted in Linn County, rather than Lane County, where his business was located, because the offenses he's charged with are alleged to have occurred in Linn County.

Since serving the warrant July 31, Hastings said investigators have been contacted by about 89 people who have information that relates to the investigation of Reinking.

Hastings added that additional charges may be filed in other counties.

Investigators ask that anyone who has had problems dealing with Reinking's company to contact OSP Detective Dan Wolverton at 541-726-2550, Ext. 219.

-- John Snell;

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Wednesday, January 02, 2008

Farmers Insurance Urged Employees to Pay as Little as Possible on Claims

'Chihuahua' Regulator Takes Bullmastiff-Bite in Insurer Fight
By David Dietz
Dec. 27 (Bloomberg) -- The North Dakota Insurance Department, which had a $4 million budget in 2007, ranks 48th in resources among state industry regulators. Only South Dakota and Wyoming have less to spend. In 2007, the tiny department did what all other state regulators failed to do.
After an investigation that began in 2004, the agency documented that Farmers Insurance Group of Los Angeles, the nation's fifth-largest auto insurer, had run nationwide promotions urging its employees to increase profits by paying as little as possible on claims. In June, the department fined Farmers $750,000.
``Some people think that since I came from a small state, I had no firepower,'' says Jim Poolman, who was commissioner from 2001 to August 2007. ``You could think of us like a little Chihuahua nipping at your heels.''
Farmers gave employees goals to tighten payments and handed out bonuses when they met the objectives, the department found. Farmers' campaign, which included brochures and pep talks, had slogans such as ``Quest for Gold'' and ``Bring Back a Billion.''
Poolman says he took on Farmers when other state insurance regulators ignored its practices or never noticed them. In fining Farmers, the department said the company had violated state laws requiring insurers to deal fairly with customers.
It also ordered Farmers to stop encouraging employees to limit payouts. The company, while saying it didn't violate any laws, consented to the fine and agreed to remind employees to evaluate claims objectively.
`Strongly Disagrees'
``Farmers Insurance denies and strongly disagrees with the North Dakota Department of Insurance allegations,'' Farmers spokesman Jerry Davies says.
Farmers' squeeze on customers began after the company paid billions of dollars in claims for disasters such as the 1994 Northridge earthquake in Southern California, according to North Dakota's findings.
North Dakota investigators found that a Farmers office in Bismarck had been told to keep payments within the previous year's average or within set ranges instead of considering cases on their merits. The Bismarck office was also instructed to try to pin more claim denials on fraud, the state found.
``Because meeting these unfair and arbitrary goals was a part of the performance evaluation process and, therefore, linked to an employee's pay, a potential conflict of interest was created between meeting those goals and effectuating a prompt, fair and equitable settlement of each claim on its merits,'' the state's consent order said.
Poolman says he didn't tell other states of his investigation because the probe was still in progress. Still, he says, state insurance departments should have known enough about Farmers' practices to do their own probes. ``It was an issue that was out there,'' he says.
Editor: Jonathan Neumann, Charles Siler
To contact the reporter on this story: David Dietz in San Francisco at

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Insurance Companies Continue to Post Record Profits as Claim Payouts are at a Fifty Year Low

Insurance Companies Continue to Post Record Profits as Claim Payouts are at a Fifty Year Low: Property/Casualty Insurance in 2007: Overpriced Insurance, Underpaid Claims, Declining Losses and Unjustified Profits 2007


Tuesday, January 01, 2008

Farmers Insurance California Wildfire Victims

Farmers Insurance California Wildfire Victims should see this link and take some insurance claim preparations consider hiring a public adjuster.

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The Insurance Hoax

This article exposes how property casualty companies (including Farmers Insurance) have been minimizing claim payouts to claimant with "hardball" tactics designed to wear down claimants. These tactics include data minipulation, over compensated expert witnesses and over zealous claims adjusters who receive bonuses and raises based upon how low they can settle claims. The Insurance Hoax Also see Home Insurers' Secret TaPublish Postctics Cheat Fire Victims, Hike Profits