Hunton Insurance Recovery Blog

On March 30, 2016, Florida’s Second Judicial Circuit (Leon County) declared that the personal and commercial residential policy data and report submitted by State Farm Florida Insurance Company (“State Farm”) to Florida’s Office of Insurance Regulation (“OIR”) constitute trade secrets under Florida law and are thus immune from public disclosure under Florida’s Public Records Act. Beginning in the first quarter of 2014, State Farm began filing its Quarterly and Supplemental Reporting System (“QUASR”) reports with “trade secret” designation. On May 15, 2014, State Farm filed a declaratory action in Florida’s Second Judicial Circuit in and for Leon County, requesting that the Court declare: (1) State Farm’s QUASR data and report are trade secretes under 812.081 and 688.022, Fla. Stat.; and (2) that State Farm’s QUASR data and report are exempt from public disclosure under Florida’s Public Records Act because they are trade secret.

Florida Stat. 624.424(10) requires insurers doing business in Florida to file quarterly supplemental reports on personal lines and commercial lines residential property policies issued in Florida. The report must include information such as the total number of policies canceled, nonrenewed, new policies written, and the “total dollar value of structure exposure under policies that include wind coverage,” for each coverage, on a monthly basis. These reports are then made publicly available on OIR’s website pursuant to Florida’s Public Records Act or “Sunshine Law.”

In State Farm’s Complaint, the insurer argues that “[c]ompetitors who acquire the information in State Farm’s QUASR reports may use that information to identify the areas of the state or types of risks that State Farm has determined are good risks. Competitors would attain valuable information regarding the competitiveness of rates in an area, where they can take underwriting risks and where they can implement marketing strategies based on State Farm’s data.” State Farm, however, fails to address the fact that this position provides it with an advantage over its competitors as it may still pull other insurer’s data while withholding its own.

After a bench trial the Court agreed with State Farm and declared the reports “trade secret.” Though a written opinion has not yet been released, the OIR’s official statement on the Court’s ruling can be found here.

Florida policyholders often rely on OIR reporting as a source for obtaining insurer financial data for use in litigation. It will be interesting to see how this ruling impacts filings made by other insurers in the state and whether they too will now seek trade secret protection. Finally, this ruling may bring additional discovery disputes as insurers seek protective orders to prevent the disclosure of these once widely available public reports.