Indiana, Missouri Ban New Business from Universal Casualty

Indiana ordered Elk Grove Village, Ill.-based auto insurer Universal Casualty Company (UCC) to stop writing new policies in the state until the company can demonstrate “improved business practices,” according to the Indiana Department of Insurance (IDOI), which fined the company $200,000.

Although UCC writes less than 1 percent of the auto insurance business there, it ranked number one on IDOI’s complaint index for 2008. The department said it received more than 200 complaints from policyholders regarding UCC’s unwillingness to pay claims properly and on time.

The Missouri Department of Insurance also has barred UCC from writing new business in that state for the same reasons. The Missouri DOI said Universal Casualty had more than 13 times the typical number of consumer complaints for a company its size. UCC wrote $5.9 million in premiums in Missouri in 2008.

The IDOI said it first investigated UCC in 2004 and fined the company $35,500 at that time for similar problems. UCC was given time to improve its business practices, the department said, but consumer complaints continued, prompting an additional investigation.

Under a commissioner’s order filed June 11, the company is required to submit “stringent Compliance Plan” and implement it before resuming new business in the state. Failure to submit such a plan in a timely manner will result in an additional $100,000 fine, the IDOI said. The order also directs UCC to reopen all consumer complaints since 2005; final determination of all such complaints will be subject to the regulators’ approval.

The company will undergo an additional examination to ensure full compliance as well, the department said.

The IDOI said a typical customer complaint would “involve the consumer calling the insurance company numerous times never receiving a human response, the company not paying enough to properly fix the car, or refusing to pay for a rental.”