Conn. Insurance Dept. Fines Safeco
HARTFORD --- Connecticut Insurance Commissioner Thomas Sullivan signed an order fining five Safeco subsidiaries a total of $434,000 for improper cancellations, improper rating, and unlicensed agents and adjusters among other violations to state law.
"While the Connecticut Insurance Department acknowledges Safeco's commitment to corrective action, we are disturbed by the number and breadth of violations our exam team uncovered. Our examination of this firm calls into question the extent to which they have proper compliance monitoring and controls," Sullivan said.
While the violations varied by company, the Insurance Department said there were consistent violations related to instances of unlicensed adjusters and non-appointed agents. In Connecticut, insurance companies are required by law to formally appoint and register with the state all agents who sell insurance products on their behalf. When combined, Safeco and its subsidiaries had 55 instances where agents were not appointed and 93 instances where individuals acted as a casualty adjuster without being licensed in accordance with Connecticut law.
Other violations included instances where companies did not include in their settlements the amount attributed to one's inability to use the property in question, which is commonly referred to as "loss of use." Violations of "loss of use" occurred, on average, 23 percent of the time, across all subsidiary companies, the department said.
Additionally, numerous underwriting and rating errors resulting in under- and overcharging of premiums and incorrect coverage amounts were found across all companies which contributed to the significant fine, the department said. These errors were primarily related to commercial products.
The company complied with the stipulation and final order, and will submit a compliance report to the commissioner within 90 days, the department said.