View this article online: https://www.insurancejournal.com/magazines/mag-features/2014/05/19/329007.htm
The Massachusetts Division of Insurance (DOI) announced on May 1 it reached an agreement with auto insurance giant GEICO to resolve inconsistencies in its reporting of auto accident information to Massachusetts state agencies and policyholders.
Under the agreement, GEICO will modify certain portions of its current business procedures, implement new procedures, and pay a $275,000 fine. The DOI said an additional $275,000 fine has been suspended pending a future re-examination by regulators.
The DOI said it negotiated the agreement with GEICO following a market conduct examination of GEICO’s practices since the insurer began offering private passenger auto insurance to Massachusetts drivers in May 2009.
Regulators said the examination had identified GEICO’s inconsistency in reporting claim information and providing operators proper notice of at-fault accident determinations and their rights to appeal those determinations to the DOI’s Board of Appeal as areas requiring a change in business practices.
Regulators said GEICO will notify individuals affected by these actions, including consumers who are no longer insured by GEICO, within 60 days.
The settlement requires GEICO to amend claim information reporting, implement new business practices to ensure operators determined at-fault receive notice of that determination and their rights to appeal, and warrant that data reported to the Merit Rating Board is effective and timely.
GEICO will be subject to ongoing monitoring and a re-examination in the next two years, after which the insurance commissioner will levy or rescind the second fine.
Under the agreement, GEICO must: