Five Safeco subsidiaries have been fined more than $430,000 in total for several violations of Connecticut's insurance law. Among the violations were the company's use of unlicensed casualty adjusters.
A release from the Connecticut Department of Insurance (CDOI) stated that while the violations varied by company, there were consistent violations related to instances of unlicensed adjusters and agents not appointed. Connecticut requires insurance companies formally appoint and register with the state all agents who sell insurance products on their behalf. When combined, Safeco and its subsidiaries had 55 instances where agents were not appointed and 93 instances where individuals acted as casualty adjusters without being licensed in accordance with Connecticut law.
CDOI said that other violations included instances where companies did not include in their settlements the amount attributed to one's inability to use their property, which is referred to as loss-of-use. Violations of loss-of-use occurred 23 percent of the time on average, across all subsidiary companies.
Additionally, numerous underwriting and rating errors that resulted in under- and over-charging premiums and incorrect coverage amounts were found across all companies, which contributed to the significant fine. CDOI said that these errors were primarily related to commercial products.
"While the Connecticut Insurance Department acknowledges Safeco's commitment to corrective action, we are disturbed by the number and breadth of violations our exam team uncovered," said CDOI Commissioner Thomas R. Sullivan. "Our examination of this firm calls into question the extent to which they have proper compliance monitoring and controls."
The total fine amount is a result of smaller fines assessed to subsidiary companies. Here are the violations and fines, by company:
American Economy Insurance Company, Indiana
$41,000
American States Insurance Company, Indiana
$68,000
General Insurance Company of America, Washington
$76,000
Safeco Insurance Company of America, Washington
$144,500
Safeco Insurance Company of Illinois, Illinois
$104,500
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