For Immediate Release: December 5, 2012

American Modern Home and American Family Home Insurance Companies to Issue $1.6 Million in Refunds

Companies fined for questionable policy features and pricing

RALEIGH -- Insurance Commissioner Wayne Goodwin has announced a settlement agreement with American Modern Home Insurance Company and its affiliate American Family Home Insurance Company. The settlement agreement includes a monetary penalty in the amount of $260,000, and an attendant corrective action plan that provides for refunds of approximately $1.6 million to North Carolina consumers.

The North Carolina Department of Insurance’s Consumer Services Division initiated an investigation of American Modern Home Insurance Company and its affiliate American Family Home Insurance Company, after resolving a September 2011 consumer complaint that indicated questionable or unclear policy features and pricing. As a result of an investigation lasting several months with continued inquiries by the Department, other irregularities were discovered and self-reported by AFHIC and AMHIC. The settlement addressed the following issues:

Per the N.C. Constitution Article IX, Section 7, the $260,000 monetary penalty is to be placed in the state fund, which is divided equally amongst the state’s public school districts.

AMHIC and AFHIC are now beginning the refund process, and affected policyholders will be notified by mail. However, due to the large number of policies and policyholders affected, completion of the corrective action plan is not expected until summer 2013. Current or former AMHIC or AFHIC policyholders seeking more information on refund eligibility, current coverage or other aspects of this matter should contact the companies' customer service department at 800-543-2644.

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