Court Orders Notice To Be Sent To Class Members In Geter, et al. v. Farmers Group, Inc., et al. Class Action Regarding Nonrenewal of Texas Homeowners' Insurance Policies.

SANDRA GETER

CAUSE NO. E-167,872

 ON BEHALF OF HERSELF AND ALL OTHERS

 SIMILARLY SITUATED

IN THE DISTRICT COURT OF

JEFFERSON COUNTY TEXAS

PLAINTIFF

172ND JUDICIAL DISTRICT

V.

FARMERS GROUP, INC.;

FARMERS UNDERWRITERS ASSOCIATION;

FIRE UNDERWRITERS ASSOCIATION;

FARMERS INSURANCE EXCHANGE;

AND FIRE INSURANCE EXCHANGE

DEFENDANTS

Legal Notice

A Pending Class Action Lawsuit May Affect Your Legal Rights

(a)

All persons who received a notice from one or more Defendants on or after November 14, 2001, advising them that their current HO-B policy covering property in the State of Texas would not be renewed because the person receiving the notice had filed three or more claims under the policy in the preceding three years and the claims did not result from natural causes;

(b)

All persons who received a notice from one or more Defendants on or after November 14, 2001 advising them that their current HO-B policy covering property in the State of Texas would not be renewed because the person receiving the notice had filed two non-weather related claims in a period of less than three years, had received a notice that their policy would be subject to non-renewal if a third non-weather related claim was filed during a three year period beginning with the date of the first of the two non-weather related claims, and who filed a third non- weather related claim during the said three year period;

(c)

All government entities, bodies and agencies of any character, federal state or local and their employees (in that capacity only);

(d)

The presiding judge(s) and other court personnel; and

(e)

The Defendants and their employees and agents.

1.

Plaintiffs contend that despite Defendants' notice of non-renewal, Geter Class members are entitled to renew their HO-B homeowner's insurance policy and Plaintiff seeks a declaratory judgment establishing whether and on what terms the Geter Class has a right to renew the HO-B coverage. Defendants have denied any wrongdoing, have denied that the Geter Class is entitled to renewal of the coverage or the requested declaration, and Defendants contend that they were not required to offer HO-B homeowners insurance policies to Texas policyholders.  The Texas Commissioner of Insurance has agreed that Texas law permits Farmers to discontinue, as it has done, offering HO-B policies to Texas policyholders, and offer, in lieu of the HO-B policy, its amended and revised HO-A policy. This Notice is not to be construed as an expression of any opinion by the Court with respect to the merits of the respective claims or defenses. This Notice is sent merely to advise you of the pendency of the action and the rights which you have with respect to the action.

2.

All Geter Class members are also members of another class in the pending case of Jan Lubin, et al v. Farmers Group, Inc. et al., C.A. No. GV202501, in the 261st District Court in Travis County, Texas. In particular, Geter Class members are members of the Rate class in Lubin ("Lubin Class"), which includes all "who received a notice at any time after November 14, 2001, that their HO-B Policy would not be renewed." Farmers has agreed with the Texas Attorney General, to settle the Lubin matter. The settlement must still be approved by the trial court in Lubin. Under the proposed settlement, Lubin Rate Class Members are eligible for a 6.8 % refund of earned base premiums paid on HO-A policies incepted or renewed from December 28, 2001, up to and including November 10, 2002, either in the form of a refund check or a credit upon renewal after approval of the settlement. The Lubin Rate Class received a reduction to any HO-A policy that was renewed or to any new policy issued, and the reduction also is to be applied retrospectively to HO-A policies issued before December 18, 2002.  The proposed settlement with the Lubin Class also provides other benefits to members of the Geter Class. Some policyholders may receive benefits as members of the Lubin Discount Class if they are current or former HO-A policyholders and former HO-B policyholders who paid premiums that were higher than what they would have been charged had the agreed upon individual discounts been applied. Lubin Discount Class members who did not receive discounts for Farmers Property Risk Assessment, age of home, and territory at the level agreed to by the State and the Farmers Parties are eligible to receive an Individual Discount Adjustment payment. In addition, Geter Class members may be entitled to recover in Lubin from the Credit Usage Notice Adjustment Fund if Farmers used incorrect credit information when calculating their HO-B premiums. Lubin Credit Usage Notice Class Members are eligible to make a claim against the Lubin Credit Usage Notice Adjustment Fund, designed to reimburse those policyholders who paid a higher premium for auto or homeowners insurance due to erroneous credit information on the individual's credit history maintained at a credit bureau, which led Farmers to charge higher premiums than they would have charged with correct credit information.

3.

The settlement in Lubin has been preliminarily approved by the District Court in Travis County. If you want to participate in the final fairness hearing in Lubin, you must be a member of the Lubin Class. The procedure for participation in the Lubin hearing will be sent to you separately in another notice.

4.

Any member of the Geter Class may opt out of the Geter Class and thus be excluded from the litigation and remain eligible to participate in the Lubin settlement. To opt out a Geter Class member need only send their name and address in writing along with a statement that they wish to opt out of the Geter Class to: Tom Kiehnhoff, Reaud, Morgan & Quinn, 801 Laurel St., Beaumont, Texas 77701 with a copy to Layne E. Kruse, Fulbright & Jaworski LLP, Fulbright Tower, 1301 McKinney, Suite 5100, Houston, TX 77010-3095. The opt out request must be postmarked by May 1, 2010. Persons who opt out will not be entitled to share in the benefits of the judgment if it is favorable to Plaintiff and the Geter Class, and will not be bound by the judgment if it is adverse to Plaintiff and the Geter Class.

5.

All Geter Class members who do not opt out as described in Paragraph 4, will be bound by the determination of the Court whether favorable or unfavorable to the Geter Class. Geter Class members are advised that only the claim for declaratory relief has been certified as a Geter Class claim and only the claim for declaratory relief will be tried in Geter. Geter Class members are warned that claims for damages or any other relief not within the scope of the declaratory relief certified will not be tried as Geter Class claims and there is a real and substantial danger that such claims may later be found to be barred by a judgment for or against the Geter Class, unless the Geter Class member opts out.

6.

If Geter prevails in this case, to renew HO-B coverage, Defendants contend that each Geter Class member must pay the full cost of the renewed HO-B policies for each year in issue, or from the year of non- renewal (in most instances from 2002) to date.  For example, the premium for a HO-B policy in 2002 has been estimated to be in excess of $5,410.00 for Sandra Geter, or total premiums of about $43,280.00 for the years 2002-2009. In 2003, the Texas Legislature passed legislation regulating rates. Each insurance exchange is required to use certain criteria in setting rates and must file proposed rates with the Texas Insurance Commissioner. Exchanges are not currently permitted to write homeowners insurance on the HO-B form – or any other policy form – without first undergoing this rate-making process. Because new rates would have to be filed with the Texas Commissioner of Insurance for approval under the new law, the exact amount each Geter Class member would be required to pay to obtain an HO-B policy renewal is unascertainable at present.

7.

Since the Geter case was filed in 2002, the Texas Supreme Court has ruled that the HO-B policy excludes mold damage claims. Therefore, any renewal of an HO-B policy offered to Geter Class members as a result of this case would not include coverage for losses caused by mold.

8.

If Geter prevails in this case, to renew a HO-B policy, Defendants contend that each member of the Geter Class would also be required to qualify for the coverage. In addition to submitting proof of ownership of the insured property, the renewal of each Geter Class member's HO-B policy would be subject to underwriting review.  Underwriting is the process used by an insurer to determine if a risk is acceptable to the insurer, and if so, how to price that risk if written. An underwriting review may include, among other things, the inspecting of the insured's home (both interior and exterior) to determine whether it continues to meet underwriting requirements. The underwriting inspection may include an inspection of the home's roof, foundation, sidings, doors, windows, driveways, porches, decks, patios, gutter, plumbing, heating, cooling systems, electrical, and the maintenance and other physical condition of the property.  If a property does not meet the actuarially sound underwriting guidelines, Defendants cannot be required to renew it without regard to whether Geter prevails in this matter.

9.

Any Geter Class member may, if they choose and at their own expense, enter an appearance through counsel of their choosing. All Geter Class members who do not opt out or enter an appearance through counsel of their choosing will be represented by Plaintiff through her counsel:

Glenn W. Morgan

Tom N. Kiehnhoff

Chris Portner

Reaud, Morgan & Quinn

801 Laurel Street

Beaumont, TX 77701

(409) 838-1000

Wayne A. Reaud

The Reaud Law Firm

801 Laurel Street

Beaumont, TX 77701

(409) 838-1000

L. DeWayne Layfield

Law Office of L. DeWayne Layfield

P.O. Box 3829

Beaumont, TX 77704

(409) 832-1891

10.

The attorneys representing the Geter Class have entered an employment contract with Sandra Geter under which Sandra Geter agreed that should she prevail in this case the attorneys would receive a contingent fee payment. However, since no damages will be recovered in this Lawsuit by the Geter Class, the attorneys representing the Geter Class plan to apply for reasonable and necessary fees based on the hours that they actually worked on this matter, assuming the Geter Class prevails at trial. If awarded by the Court, reasonable and necessary fees would be paid by Defendants.

11.

All communications and questions concerning this Notice should be sent to Plaintiff's attorneys identified in Paragraph 4, and should not be addressed to the clerk of this Court.

12.

If the address of any Geter Class member changes or is different than the address stated on the envelope enclosing this Notice, the new or corrected address information should be sent by mail to the attorneys identified in Paragraph 4.

13.

This Court has retained jurisdiction in this action to alter, amend or withdraw its order determining that this cause shall be maintained as a class action, at any time before final judgment.

14.

The pleadings and other papers filed in this action are available for inspection in the office of the clerk of this Court.

15.

You can also obtain additional information by visiting www.GeterClassAction.com or calling toll free 1-877-695-7479.

Dated: December 10, 2009

/s/ Donald J. Floyd

Honorable Donald J. Floyd

Judge 172nd District Court

Jefferson County, Texas