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State Farm to Return $6.7 Million to Arkansas Auto Insurance Policyholders

12 June 2000

State Farm to Return $6.7 Million to Arkansas Auto Insurance Policyholders

    BLOOMINGTON, Ill. - State Farm Mutual Automobile Insurance Company, the 
largest personal lines insurance company in the United States, announced today 
it will return $6.7 million in premium paid by its Arkansas auto insurance policyholders.

    State Farm Mutual policyholders in 49 states, the District of Columbia and
three Canadian provinces will receive a total of just over $1 billion in the
company's latest policyholder dividends program, which was approved today by
the State Farm Mutual board of directors.

    Policyholders will receive their dividend by check or a credit to current
customers' accounts over the next renewal cycle beginning today.

    Today's announcement eclipses the previous high of $892 million in
dividends returned to policyholders in 35 states and the District of Columbia
beginning June 1998. Arkansas customers were not a part of the program in
1998, but did receive a dividend of $3.7 million in 1993.

    The program announced today brings to about $3.3 billion the total amount
of dividends State Farm has paid to auto insurance policyholders since 1991.

    Dividends are a one-time return of premium based on recent financial
results. State Farm doesn't plan for dividends when setting prices, but
returns money to customers when financial results are better than anticipated
and business conditions permit.

    Changes in financial results that are believed to indicate long-term
trends typically are reflected in rate adjustments. State Farm has reduced
rates by 5.2 percent in Arkansas since 1997.