State files appeal over State Farm data

TALLAHASSEE — Insurance regulators are preparing for an appeals-court battle with State Farm Florida after a circuit judge blocked the release of information about the company’s property-insurance policies.

The Florida Office of Insurance Regulation filed a notice of appeal last week after Leon Circuit Judge James Hankinson prevented the release of the information, which State Farm argued was a “trade secret” protected from public disclosure.

The dispute involves quarterly reports that property insurers file with the state providing information, broken down by county, about issues such as the number of policies in place at the end of each month, the total number of policies canceled, the total number of policies not renewed and the number of new policies written.

Regulators have long collected the information and made it publicly available, but State Farm filed a lawsuit in 2014 contending that it is a trade secret under state law. Hankinson held a trial in March and issued a written order May 2 that said the information, known as a “Quarterly Supplemental Report,” or QUASR, is exempt from disclosure.

Hankinson wrote that a disputed issue is “whether QUASR data has value. The court finds that there is value to the QUASR data. … Accordingly, plaintiff (State Farm) has shown, by a preponderance of the evidence, that the QUASR data meets the definition of trade secret.”

In a memorandum filed March 4 in circuit court, the Office of Insurance Regulation said it uses the data to create a “comprehensive report” based on submissions from all insurers.

“The Office (of Insurance Regulation) provides this report to the executive and legislative branches of government to inform them of overall business volumes, as well as risk exposure (i.e. wind) on both a statewide and county basis,’’ the document said. “The identification of market share and concentration of risk is vital information for public and governmental use — particularly in the event of a hurricane or other storm event.

“This information is utilized by individual consumers, press, other states and governmental bodies,” the memo concludes.

But State Farm said it does not dispute that regulators should have the data but that the Office of Insurance Regulation “should not publish the data on its website and give competitors unfettered access to State Farm’s QUASR data. Moreover, there is no legislation that requires OIR to publicly disclose this data.”

“State Farm’s QUASR data possess independent economic value which provides an advantage to those who do not have it,” the company document said.

“Specifically, the QUASR data reflects certain detailed information about State Farm at the county level. If a competitor was looking to write or market business in a certain county, that competitor would want to capture information related to other companies that write business in that county based on policy count and premiums written. Such information may be gleaned from reviewing State Farm’s QUASR.”