Opinion ID: 783242
Heading Depth: 3
Heading Rank: 2

Heading: Risk Provision

Text: 9 In response to catastrophic losses caused by Hurricane Andrew (1992) and the Northridge Earthquake in Southern California (1994), State Farm implemented programs to reduce its risk exposure pursuant to the Risk Provision. The Risk Provision stated: 10 We retain the right to prescribe all policy forms and provisions; premiums, fees, and charges for insurance; and rules governing the binding, acceptance, renewal, rejection, or cancelation [sic] of risks, and adjustment and payment of losses. 11 In September 1994, State Farm announced an exposure management program for the State Farm Fire and Casualty Company. 3 The program limited risk exposure growth that varied by geographic areas, called exposure segments. These segments were determined by degrees of exposure to catastrophic loss. Those segments with the highest exposure were subject to the most stringent growth limitations — a requirement that the agents not write new business until policyholders' non-renewal or relocation removed 4% of the existing business. Most segments, however, were not subject to growth limitations. 12