For Immediate Release: June 28, 2011
Insurance Commissioner Announces More than $1 million in Refunds
RALEIGH -- Insurance Commissioner Wayne Goodwin today announced that SAFECO Insurance Company of America and American States Preferred Insurance Company have issued refunds totaling $1,050,082.43. The refunds were issued for 11,216 private passenger automobile, homeowners and dwelling fire new business policies on which the company overcharged North Carolina policyholders.
"Ordering insurance refunds, where warranted, is the work of a Department of Insurance dedicated to consumer protection," said Insurance Commissioner Wayne Goodwin. Over the course of the last three years, Goodwin has ordered hundreds of millions of dollars in refunds be paid from insurance companies back to individuals, families and businesses.
The refunds stem from matters discovered by the Department of Insurance during a market conduct examination encompassing calendar years 2006 through 2008 and self audits requested by the Department and conducted by the company during the course of the most recent market conduct examination.
While reviewing private passenger automobile new business policies, examiners determined there were issues stemming from the incorrect calculation of the Safe Driver Insurance Point (SDIP) surcharge and use of incorrect editions of base rates. The examination and self audit revealed that 2,462 policies were overcharged, resulting in refunds totaling $631,080.33.
While reviewing homeowners new business policies, examiners determined there were issues stemming from the "Specified Additional Amount of Insurance for Coverage A only." The examiners requested that the company conduct a self audit. The self audit was for the period of Jan. 1, 2006, through Nov. 12, 2009 -- the date the company indicated a correction was made in its rating system. The examination and self audit revealed that 8,257 policies were overcharged, resulting in refunds totaling $363,466.10.
While reviewing dwelling fire new business policies, examiners determined there were issues stemming from the company not utilizing their independently filed liability/medical payments Market Tier Relativities and deviation filing for Market Tier Relativities on the date approved by the Department; the examiners requested the company conduct a self audit. The examination and self audit revealed that 497 policies were overcharged, resulting in refunds totaling $55,536.00.
All refunds were issued prior to the conclusion of the examination. The company has submitted a corrective action plan addressing the matters discovered during the examination. The Department plans to conduct a follow-up examination to confirm implementation of the corrective action plan.