Ameriprise Fined $71,100 for Offering Deductible Discounts as Incentive to Use DRP Shops
September 2, 2010
The Colorado Division of Insurance (CDI) has levied a fine of $71,100 against Ameriprise Auto & Home Insurance Co. for steering by offering discounts on deductibles for utilizing direct-repair program (DRP) auto repair shops, according to a report from the CDI.
According to the report, Ameriprise offered an incentive program between September 2006 and January 2010 in which customers received a $100 discount off their collision deductibles for using one of the insurer’s DRP facilities. A total of 711 consumers participated in the program during that period, and Ameriprise’s $71,100 fine is comprised of $100 for every consumer that received the discount in return for using one of its shops. In addition, the company has been ordered to pay a 10 percent surcharge of $7,100 directly to the CDI.
CDI initially received a complaint in January 2010 from an Ameriprise customer who said that he/she was offered the $100 discount for selecting a repair facility on the insurer’s Direct-Repair Program (DRP), and an investigation was launched shortly after, according to the final order.
“The Division alleges that … the deductible reduction is considered an inducement by incentive to utilize a repair facility participating in the DRP,” writes CDI in its official report.
In addition to the fine, Ameriprise was ordered to cease use of the incentive immediately, and the fine is due within 30 days.
“While the repair shops contracted with Ameriprise may have done good work, the anti-steering law ensures that consumers, not insurance carriers, are in the driver’s seat to decide where they want repairs done,” says Marcy Morrison, Colorado insurance commissioner.
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