Farmers Insurance Company filed suit against Texas Insurance Commissioner Jose Montemayor and the Texas Department of Insurance (TDI) seeking to reverse an emergency cease and desist order issued against the company. Among other things, the C&D order prevents Farmers operating companies, Farmers Insurance Exchange and Fire Insurance Exchange, from initiating rate increases in the homeowners market, in order to stem what the department says are illegal and unfair pricing practices. According to the lawsuit, the plaintiffs want to nullify the C&D order, as well as related disciplinary actions issued by the defendants. The company is also seeking a permanent injunction against Montemayor and TDI to prevent them from affecting the exchanges’ ability to conduct business. Farmers asserts that the C&D order and disciplinary action exceed the authority vested in Montemayor and TDI by the Texas Insurance Code. The lawsuit also contends that the state insurance code exempts insurance exchanges from rate regulation, and that the commissioner has no authority to impose such regulations on the plaintiffs. The Office of the Attorney General filed a lawsuit against Farmers in early August charging it with violating state law by using illegal business practices.
Topics Texas Agribusiness
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