(The Center Square) – Kentucky Attorney General Daniel Cameron announced Wednesday his office reached a settlement with State Farm to end a case he filed against the insurance company more than four-and-a-half years ago.
Cameron’s office alleged State Farm did not properly notify some of its Kentucky auto insurance customers that coverage was available against uninsured and underinsured motorists. While the company did not admit culpability in the settlement agreement filed in Scott Circuit Court, it will pay the state $1.35 million to cover the state’s investigation.
Beyond the payment, State Farm also agreed to make other changes. It has enhanced policyholder notification policies, provided training for insurance agents and staff and established a database to determine what can be covered under a household auto insurance policy.
According to the settlement, State Farm will provide uninsured motorist coverage to any policyholder if there’s credible evidence they did not sign the rejection form.
The issue arose after State Farm discovered in 2018 that an agent’s staff member signed uninsured motorist insurance rejection forms without the policyholder’s consent. The employee was eventually fired, and the agent retired.
Investigators from the Kentucky Department of Insurance opened an inquiry but closed it without announcing any findings. The settlement agreement also noted that State Farm “provided responsive information” throughout the Attorney General’s review of the case.
The announcement from Cameron’s office added that State Farm plans to “use its best efforts” to offer multi-car policies in Kentucky by 2025.
“This settlement with State Farm provides us confidence in State Farm in its role as an important insurer in the Commonwealth,” Cameron said. “I’m grateful to State Farm for working with us to come to a fair resolution and for taking concrete steps to ensure something like this does not happen again.”
