December 14, 2000
A subsidiary of Farmers Insurance has been fined $20,000 by the state of Texas for illegally demanding income tax returns from consumers who filed claims under their policies.
The Texas Department of Insurance (DOI) said Fire Insurance Exchange requested income tax returns from at least 14 claimants during 1999. Texas law prohibits such demands when claims are not for fire damage or involve loss of income.
In one case, a consumer complained that the company's attorneys demanded his tax records when he filed a claim for stolen property.
The DOI said the company has agreed to pay the fine and notify other policyholders whose claims may have been affected by illegal demands for income tax returns.
