California insurance regulators have taken action against GeoVera Insurance Co., providers of residential earthquake insurance, this week. Regulators took notice of the company after having received a multitude of complaints from policyholders. According to these complaints, the insurer’s underwriting procedures are not as adequate as they are supposed to be. Regulators have investigated the matter and found that the insurer’s practices were indeed falling short of the state’s standards. GeoVera will be facing major changes as regulators look to make the company more compliant with state laws.
The insurer will be required to pay fines totaling $235,000 and will have to make major changes to its underwriting practices. Regulators also note that these changes will make it easier for consumers to cancel automatic recurring payments. These changes will also provide consumers access to the company’s public records and regulators will be working on new criteria to determine refunds that may be due to some consumers. GeoVera claims that it has not broken any of California’s laws, but Insurance Commissioner Dave Jones has brushed aside the company’s assertions.
California regulators are targeting two other California insurance companies who specialize in worker’s compensation. Zurich American Insurance Co. and Zurich American Insurance of Illinois are being accused of forcing employers to adopt high deductible plans that have not been approved by the state. These insurers will be required to make changes to these policies and provide refunds to clients where applicable. Due to the reputation Californian regulators are making for themselves as stern and aggressive, insurers are looking for ways to avoid confrontations with the California Department of Insurance.
