Maryland Fines Liberty Mutual Over Rate Notice Computer Glitch

June 6, 2008

Maryland Insurance Commissioner Ralph S. Tyler has fined Liberty Mutual companies for failure to issue proper notices of proposed rate increases to consumers. Liberty Mutual was fined $25,000 and
returned nearly $450,000 to consumers as a result of sending these improper notices.

Tyler said the insurer “cooperated in identifying that there was a computer error, fixed the problem and agreed to the sanctions we imposed.”

More than 800 notices were issued by Liberty Insurance Corp., Liberty Mutual Fire Insurance Co. and The First Liberty Insurance Corp. between November 15, 2007 and March 6, 2008 in which the companies failed to include the name of the driver that contributed to the
increase as required by Maryland law.

State law provides that any error or omission invalidates the notices and prohibits the carrier from collecting the increased premium amount. Refunds are made with interest to the complainants.

Source: Maryland Insurance Administration

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