A new federal lawsuit accusing Farm Bureau Insurance Company of deliberately concealing evidence and blocking legally required fraud reports claims the company violated the laws of multiple states, including New Mexico.
The lawsuit, filed Nov. 16 by the company’s former director of investigations and former special investigations unit manager, names Farm Bureau Financial Services, Farm Bureau Property & Casualty Insurance Company and several company leaders and attorneys as defendants.
According to the complaint, the case stems from a 2023 fire investigation in Nebraska in which a Farm Bureau claims adjuster allegedly entered a garage that was not part of the insured premises without the homeowner’s consent. When the potential legal implications of that entry became clear, the lawsuit claims Farm Bureau executives instructed employees to create a second, hidden “shell” claim file to store documentation related to the incident instead of placing the information in the original claim file. That shell file was allegedly created using another policyholder’s identifying information and stored separately from normal company systems, purportedly so that the company could hide the illegal entry.
The plaintiffs claim that this was not a one-time incident but part of a broader pattern within Farm Bureau to suppress information that should have been given to state regulators. They claim that they were ordered not to report suspected fraud to state insurance departments, even when such reports were legally required. The lawsuit claims they were eventually terminated by the company after objecting.
The complaint explicitly references New Mexico insurance law governing the reporting of suspected insurance fraud and lists New Mexico as one of the states where the company may have failed to follow lawful fraud-reporting standards, seeking instead to suppress information from regulators.
Farm Bureau and its affiliated insurance entities operate in multiple states and sell policies to consumers, homeowners and businesses across the country. If similar unlawful practices were used in New Mexico, it could impact claims tied to medical injuries, property damage or car accidents.
The New Mexico Office of the Superintendent of Insurance (OSI) has the authority to investigate alleged violations of state insurance laws, but it’s unclear if the agency is investigating the claims put forth in the suit. In an email to NM Political Report, OSI says it’s reviewing the complaint and will determine what, if any, action needs to be taken.
If OSI determines that Farm Bureau or any other insurer violated state law, it could open a formal investigation, fine the company, suspend or revoke its license to operate in New Mexico or refer its findings to the state’s attorney general for civil or criminal enforcement.
The case is currently pending in federal court in Iowa, where the defendants are expected to formally respond to the allegations. At this stage, the claims are allegations that have not yet been proven in court. Farm Bureau did not respond to a request for comment.
