An historic ejection of an insurance company from Georgia is at hand if the insurer does not comply with state-mandated rules and radically adjust its claims practices over the next two years.
Georgia Insurance Commissioner John W. Oxendine gave Safeway Insurance Company of Georgia an ultimatum and fined them $500,000 to convey the magnitude of the issue.
“We told them they have two choices,” Oxendine said. “They can leave now, or they can fundamentally reform the way they’re doing business.”
A subsidiary of Chicago-based parent organization National Safeway Co., the Georgia firm violated several state laws according to Oxendine, prompting him to levy the fine.
“This is a very unique order,” Oxendine said. “It’s the largest fine that has ever been imposed on an auto insurance company in Georgia.”
Oxendine believes the Safeway adjusters are not adequately trained to perform to his state’s standards. He said Georgia law requires independent adjusters to be licensed, ensuring that they complete and pass pertinent technical training. Conversely, adjusters employed by private insurance companies in the state of Georgia are not required to be licensed; instead the insurer assumes responsibility for properly training and educating their adjusters. A condition of the punishment includes mandatory participation in state-run training for Safeway’s adjusters.
The commissioner formed a list of stipulations Safeway must abide by in order to remain in business in Georgia. He said failure to comply would prompt a swift expulsion after a two-year, highly monitored grace period. An “intense supervised probation” will be highlighted by quarterly state-run surveillance activities.
If violations continue, Oxendine said the company would be ousted without the privilege of a hearing: “We’ll be watching them long after the two year probation ends,” Oxendine said. “Someone will be looking over their shoulder for a long time. The conduct of this company is unacceptable, and if I don’t see a reverse in their business practices, they face being kicked out of the state.”
According to Oxendine, Safeway adjusters have a habit of “overriding” medical doctors’ findings on bodily injury cases without proper or qualified documentation. Certified documentation will be required in every case where adjusters contradict a medical professional’s findings.
The company will also be required to revamp its procedures for evaluating payments on vehicles that have been declared total losses and issue refunds for claimants who were previously underpaid for claims.
Calls to Safeway Insurance were not immediately returned.