Allstate, State Farm, AIG Property Casualty Company, and Tri-State Consumer Insurance must all pay over $10.6 million.
A ruling has been issued for a lawsuit the New York Department of Financial Services filed against four insurers has resulted in fines of more than $10 million in insurance company fines for customer restitution.
The lawsuit was filed following the violation of insurance statutes and regulations in the state.
The NY State Department of Financial Service Superintendent Linda A Lacewell made the announcement of the lawsuit against the insurers. The affected insurers who must pay the insurance company fines included Allstate Insurance Group, State Farm Insurance Group, Tri-State Consumer Insurance Company, and AIG Property Casualty Company. The lawsuit accused them each of violating New York state statutes and regulations and resulted in a fine of $2.1 million each.
Superintendent Lacewell explained that Allstate and State Farm also need to pay $10.6 million in consumer restitution as a result of the findings of investigations into the way those insurers handled personal automobile claims in the state.
The additional insurance company fines were the direct result of practices regarding auto insurance.
The Department of Financial Services found in its investigations that Allstate and State Farm were in violation of insurance regulations having to do with auto claims and practices, as well as notice requirement statutes and regulations violations involving policy cancellations. The filing from the department indicated that the insurer violations denied affected New Yorkers full policy benefits.
Among the most significant violations identified were:
- Failures to accurately calculate no-fault payments for loss earnings from work
- Failure to make payments of statutory interest on overdue no-fault payments
- Failures to provide senior citizen customers with require in-writing notification of the availability of third-party designee notice procedure
- Failures to provide benefit explanation forms to injured parties every six months.
The department also required Allstate to pay $784,168, and State Farm to pay $9,799,000 in customer restitutions among the insurance company fines. Moreover, Allstate was also required to pay $671,200, State Farm $644,700, AIG $583,900, and Tri-State $217,000 for their respective violations to New York state statutes and regulations.