"These accusations are unfounded, and I find them personally insulting," said Harold Gray, State Farm's regional vice president for the area that includes Washington, D.C. "I know from my 26 years of experience that these broad allegations are false. I would not work for a company that stands for any of these practices."

Kim Brunner, State Farm's general counsel, said the litigants had recently had a partial summary judgment entered against them in a federal lawsuit over contract issues. "And what they've done," he said, "is piece together a patchwork of disconnected litigation and unfounded allegations that, quite frankly, don't connect with the millions of State Farm policyholders who know the company and its agents."

He said virtually all of the 40 people who signed a letter seeking an investigation have been involved in litigation with State Farm for more than two years -- 28 of them over State Farm's decision to terminate their contracts.

Brunner noted State Farm's success has been built on individual relationships, that it has been the nation's largest auto insurance company since 1942 and the largest homeowners insurer since 1964, a status it achieved through fairness in its dealings with customers.

"State Farm is owned by its policyholders and is proud of its agents and the service and expertise they provide," said Chuck Wright, executive vice president and chief agency and marketing officer." These unhappy and few former and current agents who held a news conference this morning clearly don't represent our other 16,200 agents around the United States and Canada."

"Insurance is the most highly regulated industry in the United States," Brunner added. "Every product we sell and every claim we handle is subject to regulatory approval or scrutiny. We respond to any and all inquiries from regulators and lawmakers."

Wright and Brunner had this to say about some of the specific allegations:

Consumer abuse. "Our policyholder renewal rates are the highest in our history and among the highest in the industry," Wright said. "Our use of generic auto crash parts is one of the factors that has helped us reduce our auto insurance rates more than $2.5 billion in the last two years and has allowed us to return $1.5 billion to our customers in dividends since 1997."

Inflated insurance pricing. "Using claim experience over the last several years, State Farm projects what its rate needs will be," Brunner said. "Our prices are continually monitored and any changes, up or down, require explicit regulatory approval in just about every state. In addition, we're actively involved with organizations such as the Insurance Institute for Highway Safety and the Institute for Business and Home Safety aimed at preventing losses that drive up rates."

Redlining. "This practice is illegal, and it has long been State Farm's policy that property insurance will never be denied because of an applicant's race, color, national origin, or where a person lives within an urban area," Wright said. "We proudly support organizations aimed at increasing minority home ownership and revitalizing neighborhoods in urban areas, such as Neighborhood Reinvestment, the National Conference of LaRaza Hope Fund and the Social Compact."

Life insurance sales practices. "A class-action lawsuit settled 14 months ago raised concerns over life insurance sales," Brunner said. "Those concerns arose out of some life insurance illustrations that some policyholders may have viewed as promises of future performance. We settled that case and have reviewed our sales practices to ensure our customers are getting the products and level of service they have come to expect from State Farm."

Gray said he regretted State Farm had to deal with this distraction. "Every day we deal with tens of thousands of our policyholders' claims -- one at a time," he said. "An organization of nearly 80,000 employees and more than 16,000 agents isn't going to be perfect every day. But our policyholders, our employees, our agents and insurance regulators know we do our job extremely well with fairness and integrity. And we try to do it better than any other insurance company."

CONTACT: State Farm Insurance Public Affairs Department, 309-766-2086