HELENA – More than 30 Montanans will see premiums waived – or get cash refunds – from a $698,000 settlement reached last month between Montana Insurance Commissioner Monica J. Lindeen and a San Francisco-based company that sold Montana farmers a kind of insurance against weather events.
Lindeen’s office began getting complaints about the company – The Climate Corporation – in October of 2012. An insurance agent who sold the insurance reported the company’s materials were misleading, leading many farmers to believe they were getting a kind of crop insurance when they really were not.
Additionally, the company was selling their insurance in Montana with unlicensed agents who did not have formal appointments with the company.
Crop insurance protects farmers from actual losses, such as harvests hurt by insects or drought. The kind of insurance Climate Corp sold, however, was specific to actual rain or weather events. Farmers could buy Climate Corp insurance against receiving too much rain, for example, whether or not it affected their crops.
Climate Corporation gets local computer data from the National Weather Service — and adds to that data information gathered from local weather reporting stations – which are typically at local airports.
If the computer data from the government and the local information weather reporting stations match agreed criteria – as specified in the Climate Corporation contract – the farmer gets paid. If not, Climate can keep the insurance premiums paid by the farmer.
According to complaints, many farmers bought the insurance believing it was a kind of supplement to traditional crop insurance.
Climate Corp. was started in 2006 by two former Google executives. In October of 2013, Monsanto bought the company for nearly $1 billion.
Climate Corp., settled with Lindeen’s office before state attorneys filed an action against the company. According to the settlement, Montanans who already paid their premium would get their money back, a total of just under $270,000. Other Montanans who had not yet paid their premium would see those costs waived, a total of just under $700,000.
The company had until the end of January to send refunds to its Montana customers. Those checks have already been sent out. Some 34 Montanans had policies with Climate Corp. and are part of the settlement.
Source: Office of the Montana State Auditor
