A Chicago-based auto insurance company has paid $256,000 in fines and is required to more quickly process, investigate and pay claims under a settlement reached with the Missouri Department of Insurance. Universal Casualty Co. also has paid more than $15,500 to consumers for underpayments found during a comprehensive market conduct examination.
The settlement is the latest in a series of actions against the company: In June 2009 the department issued a cease and desist order against Universal Casualty, prohibiting it from selling any new insurance policies in Missouri. This came after an extremely high number of consumer complaints about claims handling. The department lifted the order in April 2010 after the company made significant changes to management and operations.
At the time of the department’s C&D order, consumers had filed more than 100 complaints against Universal Casualty.
Among more than 600 potential violations of Missouri law, the examiners found the company:
- Failed to properly investigate and settle claims, delaying payments in many cases;
- Improperly denied or underpaid claims;
- Failed to respond promptly to claims;
- Failed to maintain a log of all written complaints made against the company;
- Failed to respond to inquiries from the DOI;
- Failed to maintain records of correspondence with policyholders; and
- Could not prove it sent sales tax affidavits to policyholders whose vehicles were totaled, as required by law. This affidavit allows consumers to receive a sales tax reduction when they buy a new vehicle. Universal Casualty was ordered to re-examine records to ensure that sales tax affidavits have been sent to all eligible policyholders.
Universal Casualty wrote $4.3 million in premiums in 2009. That accounted for less than 1 percent of the auto insurance market in Missouri.