Pa. Commissioner Releases July Insurance Enforcement Actions

August 29, 2003

Pennsylvania Insurance Commissioner Diane Koken, in her capacity as the state regulator for the insurance industry, has released enforcement actions and market conduct examinations taken in July against insurance producers and companies licensed to conduct business in the Commonwealth.

“Enforcement actions are taken after an investigation reveals violations of Pennsylvania statutes or regulations,” said the bulletin. “If a formal charge is filed against the individual or company, a hearing is held before the Insurance commissioner. Enforcement actions conclude with the issuance of a consent order, a settlement agreement, or an order and adjudication.”

The bulletin also noted that “On August 16, 2002, the Market Conduct Division commenced an industry-wide review of private passenger automobile underwriting guidelines in place for Pennsylvania business during the first six months of 2002. All companies were requested to submit their private passenger automobile underwriting guidelines to the Department for review. The underwriting guidelines were reviewed primarily for compliance with Section 2003 of Act 68 of 1998 (40 P.S. 991.2003). Section 2003 of the Act establishes specific underwriting criteria which may not be used to cancel or refuse to write or renew a policy of automobile insurance.

An enforcement action, in the form of a consent order, was taken against those companies identified with prohibited criteria in their underwriting guidelines. Each consent order issued identifies the prohibited criteria, requires the Company to cease and desist from engaging in the activities described in the order, revise and reissue their underwriting guidelines within 30 days of the date of the order and pay a monetary penalty. Penalty assessments varied based upon the nature, type and specificity of the prohibited criteria identified in the Company’s underwriting guidelines.”

A description of the actions taken for the month of July can be found on the Department’s website at www.insurance.state.pa.us.

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