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Letter to the Editor

State Farm To Limit N.J. Customers

TRENTON, N.J. -- The nation's largest auto insurer will stop taking new customers in New Jersey after a subsidiary lost more than $100 million last year, according to the state's insurance commissioner.

Regulators granted State Farm Indemnity permission to reject new car insurance policies after reviewing financial statements.

The company insures more than 811,000 automobiles in New Jersey and collected approximately $79 million in profits in 1997 and 1998.

In 1999, the company went after high-risk drivers by offering them "preferred" rates and discounts up to 35 percent.

The company, a subsidiary of State Farm Mutual Automobile Insurance Co., stopped the practice in January, but not before losing more than $128 million last year.

State Farm will be allowed to write new policies for existing customers under the order and existing rates are not expected to be affected. The order signed Friday will continue through December.

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