BAT Unit to Urge

Talks With FarmersLOS ANGELES - Farmers Groups Inc. said Monday that a subsidiary of London- based BAT Industries PLC will make a proposal to shareholders at Farmers' annual meeting May 20 urging the companies to enter merger negotiations.

The shareholder proposal didn't indicate any change in the offer by the BAT unit, Louisville, Ky.-based BATUS Inc.

In announcing it had been informed by BATUS that it would make the shareholder proposal, Farmers noted that it already has rejected as inadequate BATUS' offer of $60 per share, or $4.13 billion.

Farmers spokesman Tom Welch said the Los Angeles-based insurer will make a recommendation to shareholders on the proposal but declined to say what it would be.

BATUS hasn't budged from its initial offer, despite suggestions by some analysts that Farmers would be able to command a price of $70 to $75 a share

from someone seeking control of the company.

BAT is a holding company with interests in tobacco, insurance and paper products. For some time, it has been seeking to enter the U.S. financial services market.

Farmers is the nation's seventh-largest insurance company.

Fla. Agency to Seek

Stronger Authority

TALLAHASSEE, Fla. - The Florida insurance commissioner said he will ask the state Legislature to strengthen the authority of the agency that monitors hospital costs.

Commissioner Bill Gunter said current law allows more than half of all hospital budgets to escape review by the Hospital Cost Containment Board.

It's time we untie this board's hands once and for all and allow it to be the watchdog agency that the people of Florida need, Mr. Gunter said.

The proposal also would:

* Provide minimum standards for long-term nursing care policies.

* Require individual Medicare supplement insurance policies to return at least 65 cents in benefits for every dollar paid in premiums. Group policies would have to return at least 75 cents.

* Require health insurers to cover the medical costs of adopted infants at birth if the adoption agreement was made before birth.

* Create a fund to pay the debts of insolvent health maintenance organizations.

NY Issues Regulation

On Purchasing Groups

NEW YORK - Insurance purchasing groups transacting business in New York must try to buy coverage, through excess lines brokers, from authorized insurers before turning to unauthorized companies.

The state insurance department issued the regulation Monday and will hold a public hearing March 9 for possible amendments.

The regulation applies to purchasing groups allowed under the Risk Retention Act of 1986, which permits similar liability risks to form purchasing groups to buy coverage.

Excess lines brokers must be turned down three times by authorized insurers before placing coverage in the unauthorized market.

Wrongful Firing Suits

Netting Bigger Awards

SAN FRANCISCO - A new survey says juries are granting big awards to fired workers who take their employers to court and win.

The study by the California Employment Lawyers Association says juries in California last year awarded an average of $250,000 to workers who won wrongful dismissal suits.

Workers won 67 percent of the 58 jury verdicts reported in 1987, compared with 57 percent of 67 cases that were tried in 1986.

The typical verdict in 39 cases won by employees was more than double the

average award of $91,000 made in similar cases in California in 1986.