A top State Farm executive was fired this week after saying the insurer’s California rate hikes are “kind of” orchestrated and after making disparaging remarks about Pacific Palisades homeowners that were caught on an undercover video.
Haden Kirkpatrick, State Farm Mutual’s vice president for innovation and venture capital, was recorded saying that the request by its California subsidiary for rate hikes are “kind of” orchestrated “but not in the way you would think,” according to a video published by O’Keefe Media Group, a conservative outlet.
“Our people look at this and say, ‘S—, we’ve got like maybe $5 billion that we’re short if something happens.’ We’ll go to the Department of Insurance and say, ‘We’re overexposed here, you have to let us catch up our [rates]’ … He’ll say ‘Nah.’ And we’ll say, ‘Okay, then we are going to cancel these policies,’ ” he said in the video, recorded surreptitiously in January after the fires.
State Farm General, the subsidiary and California’s largest home insurer, has filed for an emergency 22% rate hike for its homeowners policies, citing the fires and a $5 billion decline in its surplus account over the last decade. The insurer has said it is now left with just over $1 billion in surplus to handle another big catastrophe.
Read more: Insurance commissioner rejects State Farm’s request for 22% emergency rate hike
That request was subject of a recent hearing with Insurance Commissioner Ricardo Lara, who initially rejected the hike but agreed to consider more evidence.
During the meeting, a State Farm executive told Lara that without the rate hike the company “may have to take actions that we otherwise don’t want to do,” according to a transcript of the meeting.
The company has estimated the Pacific Palisades, Eaton and other fires on Jan. 7 will cost it more than $7 billion, though with reinsurance its net losses will be closer to $600 million.
In response to the video, Michael Soller, a spokesperson for Lara, said, “We want answers from State Farm. This only raises more questions.”
Haden also is recorded saying homes should not have been built in Pacific Palisades but that residents want to have “natural areas around them for their ego,” calling the area “a f— desert.”
He further said he tasked the company’s HR team to create a year “2040” workforce that is more “Hispanic and Latino,” which he said was being “biased … away from my own kind.”
