The Pennsylvania Insurance Department said 2014 was a banner year for consumer protection. The department said its Office of Market Regulation concluded 2014 by collecting more than $4 million in penalties and fines and recovering approximately $295 million in restitution for consumers. The department also resolved more than 13,000 consumer complaints.
The department said it closed 186 enforcement actions in 2014, revoking 70 individual insurance licenses and placing an additional 19 individuals under indefinite supervision due to prior felony convictions. Thirty-two market conduct examinations also were conducted, requiring insurance companies to implement corrective action plans to effect compliance with Pennsylvania laws and regulations.
The department said the reasons for the actions were the result of companies and/or agents:
• Using unapproved insurance contracts or rates.
• Non-renewing or cancelling policies for improper reasons.
• Selling life insurance and annuities which were not suitable for the applicants.
• Failing to provide applicants with proper sales and replacement disclosures.
• Failing to promptly pay claims.
• Misappropriating premium dollars.
• Forging or altering signatures of policyholder applications.
• Failing to disclose prior felony and misdemeanor convictions.
• Selling unlicensed health plans.
• Lying on license applications or renewal forms.
The department said a large portion of the penalties and restitution are a result of several multi-state examinations targeting the business practices of the life insurance industry, where some companies were not properly using the Social Security Administration’s Death Master File to find life insurance beneficiaries, or used it to terminate the payment of annuity benefits and not trigger the payment of life insurance policy benefits. Pennsylvania served several times as a lead state in these investigations.
Enforcement and market conduct actions are taken after an investigation or examination reveals potential or actual violations of Pennsylvania statutes or regulations, and concluded with the issuance of a consent order, a settlement agreement, or an order and adjudication.
Source: The Pennsylvania Insurance Department
Topics Legislation Pennsylvania
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