North Carolina residents insured by two companies are going to receive refunds totaling more than $1 million after state regulators found they overcharged their personal lines policyholders.
SAFECO Insurance Co. of America and American States Preferred Insurance Co. have issued more than $1 million in refunds to customers with private passenger automobile, homeowners, and dwelling and fire policies, according to Insurance Commissioner Wayne Goodwin.
The SAFECO and American States refunds are as the result of a series of market conduct exams by state regulators covering 2006 through 2008. The two insurers also conducted a series of self-audits at the request of regulators.
A review found that the insurers incorrectly calculated their Safe Driver Insurance Point surcharge and used the wrong editions of the state’s approved base rates. The examination revealed that 2,462 policyholders were overcharged, resulting in refunds totaling $631,000.
While examining the insurers’ homeowners’ new business polices, regulators found there were issues stemming from the insurers’ “Specified Additional Amount of Insurance for Coverage A.” At the request of regulators, the insurers conducted a self-audit for the period of January 1, 2006 through November 12, 2009 when the insurers made a correction in their rating system. The examinations revealed that 8,257 policyholders were overcharged a total of $363,000.
Regulators also reviewed the insurers’ dwelling and fire new business policies and found the insurers did not properly use their market tier relatives for liability and medical payments. Likewise, the insurers did not use a policyholder deviation when it was approved by the department. After a self-audit, the insurers found that 497 policyholders were overcharged resulting in policyholders refunds totaling $55,500
Goodwin said the insurers had submitted a corrective action plan to make sure the problems are fixed going forward. He said the department will conduct follow-up examinations.
Over the course of the last three years, Goodwin has ordered insurers to return policyholders hundreds of millions of dollars in refunds.
Topics Carriers North Carolina
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