The Connecticut Department of Insurance (DOI) ordered Massachusetts-based Liberty Mutual Insurance Companies to pay $296,000 in fines plus $632,042 in restitution to approximately 3,600 policyholders after a market conduct exam revealed violations to state law and incorrect charges on auto policies.
“It is imperative that consumers are treated fairly,” said Insurance Commissioner Thomas R. Sullivan. “I am pleased that my staff was able to identify these violations, work with the company to provide restitution, and make a difference for policyholders.”
The market conduct exam revealed various violations to Connecticut state law primarily related to incorrect automobile and commercial rating, licensing and appointments of agents, licensing of adjusters and appraisers, and instances of improper claim settlements. Fines for all violations totaled $296,000.
In addition to the fines, Sullivan ordered the Liberty Mutual Companies to pay $632,042 in restitution. The majority of the restitution, $628,875, was returned to 3,595 policyholders who were overcharged for premiums on their auto insurance policies. The remaining restitution went to seven policyholders who were incorrectly charged a surcharge on their private passenger automobile policies.
Violations and fines varied by company:
Liberty Mutual Fire Insurance Company, Wisconsin $158,500 in fines; $573,397 in restitution
Liberty Mutual Insurance Company, Massachusetts $10,000 in fines
Liberty Insurance Company, Illinois $118,500 in fines; $22,332 in restitution
First Liberty Insurance Company, Iowa $9,000 in fines; $36,313 in restitution
The company agreed to perform a complete review of its practices and procedures to ensure the areas of concern comply with Connecticut law, according to the DOI.