View this article online: https://www.insurancejournal.com/news/east/2020/02/27/559574.htm
The New York State Department of Financial Services (DFS) has fined Asurion Insurance Services Inc. and Asurion Protection Services LLC (Asurion) four million dollars for providing inadequate consumer disclosures for insurance offerings for mobile phones, tablets and other wireless communication equipment and for improperly bundling such insurance with other products.
Asurion is a New York-licensed insurance producer that assists wireless communications equipment vendors by packaging insurance programs and designing brochures and other materials.
“Licensees are expected to follow the Department’s direction,” DFS Superintendent Linda Lacewell said in a DFS press release. “DFS is committed to ensuring that the New York insurance market is transparent and that consumers receive the disclosures they need to make the best purchasing decisions for themselves. When companies fail to comply with laws and regulations, particularly after the department draws attention to potential deficiencies in compliance, DFS will step in and robustly enforce the insurance law for the benefit of consumers.”
Asurion provided brochures that failed to properly disclose, among other things, how Asurion was compensated and bundled insurance with other products at a discount, providing an impermissible inducement to the purchase of the insurance. These violations persisted for more than a year following guidance DFS issued that addressed these shortcomings in the industry.
Insurance Circular Letter No. 1 (2018) identified six improper practices in the industry, including failure to provide required notices and disclosures, and tying insurance with non-insurance. The letter advised wireless communications equipment vendors and their producers that all companies selling this type of insurance must disclose to consumers, in brochures or other written materials, information like how the producer is compensated, the availability of premium credits for holders of third-party service contracts, and fees imposed upon failure to return a device after replacement.
As part of the settlement, Asurion has submitted amended materials to DFS and agreed to comply with all laws and regulations addressed in the circular letter.
Asurion is an insurance producer assisting wireless communications vendors who offer wireless communications insurance, including but not limited to mobile phone and tablet insurance. Asurion’s clients include Sprint, Verizon, AT&T, Cricket and Metro.
Source: New York State Department of Financial Services