Pa. Department Releases Market Conduct Exam Report; Results from Review of Private Passenger Auto Underwriting Guideline

Pennsylvania Insurance Commissioner Diane Koken, in her capacity as the state regulator for the industry, has released results from the Private Passenger Automobile Underwriting Guidelines review conducted by the Department’s Market Conduct Division.

“On August 16, 2002, the Market Conduct Division began an industry-wide review of private passenger automobile underwriting guidelines in place for Pennsylvania business during the first six months of 2002,” Koken said. “The underwriting guidelines were reviewed primarily for compliance with specific underwriting criteria which may not be used to cancel or refuse to write or renew a policy of automobile insurance.”

Companies identified with prohibited criteria in their underwriting guidelines were issued a consent order. The consent orders identify the prohibited criteria and require the company to cease and desist from engaging in the activities, revise and reissue their underwriting guidelines within 30 days of the date of the order, and pay a monetary penalty. Penalty assessments vary by the nature, type and specificity of the prohibited criteria identified in the company’s underwriting guidelines.

Below is a brief summary of the actions that were concluded during the month of April.

Date Company Penalty Amount
5/5 Atlantic Mutual Insurance Company, Madison, N.J. $ 5,000
5/5 Centennial Insurance Company, Madison, N.J. $ 5,000
5/5 Lincoln General Insurance Company, York $ 5,000
5/5 Pennsylvania National Mutual Casualty Ins. Co.,
Harrisburg $ 9,000

5/7 AAA Mid-Atlantic Ins. Co. and Keystone Ins. Co. $24,000

Philadelphia

5/15 American Commerce Insurance Company, Columbus, Ohio, $12,500

5/22 Hanover Insurance Company, Worcester, Mass., $12,500