Six insurance companies have been targeted for fines by state insurance commissioner, Mike Kreidler.
He has ordered the companies to pay a total of $534,000 after an investigation found that the companies frequently failed to document rate changes in their commercial policies only. The companies write business for personal and commercial risks and are subsidiaries of New Jersey company, Chubb & Son.
Companies cited:
- Federal Insurance Company
-
Pacific Indemnity Company
- Great Northern Insurance Company
- Executive Risk Indemnity, Incorporated
Last November, Kreidler threatened to suspend the companies for nine month, but the move was put off when the companies constented to amend their procedures for internal audits.
These particular companies have had run-ins with the government as far back as 1998. The state found problems reminiscent to the ones today and has repeatedly fined the companies since 2000. By 2007, the number of violations numbered in the hundreds.
In a statement, Kriedler assured that the companies in question have compliance as a top priority. He is hopeful that his approach will resolve the long history of these problems.
“Rate decisions must be based on a sound rationale and documented,” says Kriedler. “Repeated exams showed that Chubb wasn’t playing by those rules.”
Though the suspension has been put on hold, the commissioner has warned Chubb to exercise caution as it will be under high scrutiny for the next three years. Should any violation occur in that time, the companies in violation would be suspended outright and fined accordingly.
Chubb has agreed to pay the amount in full and the money will go to the state’s general fund.
