Two pet insurers must repay $4.7 million to consumers
An investigation by the Washington DOI found 'tens of thousands of law violations among the two companies.'
Washington Insurance Commissioner Mike Kreidler issued a fine of $950,000 against ACE American Insurance Co. and Indemnity Insurance Co. of North America for overcharging 18,000 Washington consumers to the tune of $4.7 million for nearly five years.
The insurers sold pet insurance policies through the Healthy Paws Pet Insurance agency starting in 2013. Kriedler and his investigative team found tens of thousands of law violations between the two insurance companies; the most egregious were rate increases that were not disclosed to the consumers, despite a state law requiring insurers to notify consumers about rate increases 20 days before the policy renewal date.
Further findings of the investigation concluded that Indemnity Insurance overcharged 6,515 policies by $121,000, in addition to charging customers based on their pet’s age, which went against the rates approved by Kreidler. Other violations include cancellation policies that contradicted policy language, incorrectly applied discounts, and the incorrect use of the pet health change form as a renewal certificate.
In July 2019, Kreidler separately fined Healthy Paws $20,000 for falsely representing itself as the insurer, using unappointed and unlicensed producers to sell insurance, and offering discriminatory promotions to customers.
The insurance companies will have to pay back the $4.7 million, including interest, to policyholders by April 15, 2020. The range of reimbursement goes from less than $1 to more than $2,500 per policyholder. In exchange for a partial suspension of the fine, ACE and Indemnity both must charge accurate rates and correct the other violations of law that were uncovered during the investigation.
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