Washington State Insurance Commissioner Mike Kreidler has ordered six subsidiaries of Chubb & Son to pay a $534,000 fine for violating state insurance laws.
Federal Insurance Co., Pacific Indemnity Co., Great Northern Insurance Co., Executive Risk Indemnity Inc.; Vigilant Insurance Co. and Northwestern Pacific Indemnity Co. agreed to pay the fine. An additional $534,000 fine was suspended, as long as the companies follow an agreed-to compliance plan that, among other conditions, requires semi-annual self-audits, the Office of the Insurance Commissioner announced.
In November 2010, Kreidler called for a $534,000 fine and a nine-month suspension of the six companies’ insurance certificates, which would have barred them from writing new coverage during that time period. Chubb appealed the initial order.
Under the consent order, there will be no suspension as long as the companies commit no further violations for three years.
“The companies have assured me that compliance is a top priority,” Kreidler said, “and I’m hopeful that this approach will resolve these ongoing problems.”
The OIC said a key issue was the companies’ repeated failure to properly document the reasons for charging higher or lower rates on certain policies. Exams and audits dating back to 1998 found the same problems cropping up repeatedly. Since 2000, Washington state insurance officials said they have repeatedly fined Chubb and Chubb subsidiaries, and urged them to fix the problems.
Nonetheless, repeated examinations and a series of company self-audits ordered by Kreidler since 2007 found hundreds of violations of state law, including numerous recent ones. In some cases, more than half the sample files checked had violations, the OIC said.
Fines imposed by the state insurance commissioner’s office are deposited in the state’s general fund to pay for other state services.
A copy of the order will be posted on the agency’s enforcement page at: www.insurance.wa.gov/orders/enforcement.asp.
Source: OIC
Topics Washington Chubb
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