Connecticut insurance officials have ordered Massachusetts-based Liberty Mutual Insurance Companies to pay almost $1 million in fines and restitution after a market conduct exam exposed several violations.

Connecticut Insurance Commissioner Thomas R. Sullivan made the announcement last week, saying that the company owed $296,000 in fines plus $632,042 in restitution to 3,602 policyholders for a variety of offenses. According to Sullivan, the market conduct examination involved violations to Connecticut state law for a variety of reasons, including: licensing of adjusters/appraisers; instances of improper claim settlements; incorrect automobile and commercial rating; and licensing/appointments of agents.

Sullivan also noted that the majority of the restitution -- $628,875 -- went to policyholders who were overcharged for auto insurance policies. The remaining restitution was awarded to seven policyholders who were incorrectly charged a surcharge on their private passenger auto policies.

"It is imperative that consumers are treated fairly," said Commissioner 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 policy holders."

Liberty Mutual acknowledged the mistakes and said it has taken measures to ensure they do not occur again.

"[We] regret the errors cited in this 2006 market conduct exam," said John Cusolito, vice president and manager of Liberty Mutual's external relations. "Many of these errors were self-identified and reported to the Department of Insurance back in 2006 and 2007. We worked cooperatively with the Department on corrective actions and proactively made refunds to affected customers. This is not systemic of any improper and irresponsible behavior, and the errors cited have been rectified."

Here is how the violations and fines were divvied out:

Liberty Mutual Fire Insurance Company, Wisconsin

$731,897

Liberty Mutual Insurance Company, Massachusetts

$10,000

Liberty Insurance Company, Illinois

$140,832

First Liberty Insurance Company, Iowa

$45,313

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