Punitive Damages Are Not "Losses Incurred" - - CFO.com

Punitive Damages Are Not "Losses Incurred" - - CFO.com

(click link for complete article)

In a November court ruling, State Farm Mutual Insurance saw its argument shot down when judges sided with the Internal Revenue Service in a case related to contingent liabilities. In the case, which was decided on November 8, petitioner State Farm claimed that based on its method of accounting, $202 million was properly included in its loss reserves. The IRS, and eventually several courts, saw it differently.

Market manipulation and price fixing explained to the point even a clown can understand. Paige St John exposes the State Farm shuffle in Florida for the Herald Tribune. « slabbed

Market manipulation and price fixing explained to the point even a clown can understand. Paige St John exposes the State Farm shuffle in Florida for the Herald Tribune. « slabbed

When State Farm stepped up its march out of Florida, it loudly and publicly claimed hurricanes were pushing it toward financial disaster.

The company argued it had to leave the Florida coast — and drop nearly half a million customers — because it could not profit in a state wracked by so many storms.

But State Farm never really left Florida.

A Herald-Tribune investigation finds Florida’s largest insurer has instead found an easier way to profit from homeowners desperate for coverage. And the desperation State Farm helped create allows it to command some of the highest rates in the world.

The conduit for this back-door insurance is DaVinci Reinsurance Ltd., an offshore company with no physical office or employees of its own that sells policies to insurers to cover their storm losses.