Outgoing Mississippi Insurance Commissioner George Dale says he hopes to complete a market conduct survey of State Farm before his term is up. A market conduct survey, in case you’ve not seen one, looks like this, and is basically an audit of claims files or other pertinent document pursuant to a state insurance department’s regulatory powers. Sometimes the market conduct survey is broad and examines a company’s performance in total, sometimes the survey is narrow and confined to certain kinds of claims. Market conduct surveys are typically reports by exception — in other words, they deliniate the state’s standard and then find exceptions to it, if any.
Here’s a story in the Sun Herald on Mississippi’s year-long market conduct survey of State Farm. What will it show? Dale indicates in the story that it will reveal some problems, although the tenor of his remarks seems to be that some problems are inevitable in claims adjusting involving a catastrophe the size of Katrina. I was curious about the statement by a State Farm spokesman about mistakes being made and efforts made to correct them. I wonder what these mistakes are and if they are the kind of mistakes that will be discussed in the market conduct survey. According to the story, we won’t have to wait long to find out.