Connecticut Insurance Department Fines GEICO Companies Total of
$177,500; Two GEICO Subsidiaries Found Non-Compliant with Auto Glass
Deductible Law, According to Report
April 13, 2010
The Connecticut Insurance Department has fined four GEICO subsidiaries
a total of $177,500 for several items found during a recent market
conduct examination. Among the citations noted in the recent report,
two specific subsidiaries, GEICO Casualty and GEICO Indemnity, were
cited for failure to comply with the state's law requiring that
optional coverage for safety glass repair or replacement be offered
at all deductible levels.
"They've found instances where GEICO did not offer glass repair
or replacement coverage at all deductible levels," says Dawn
McDaniel, a spokesperson for the Connecticut Insurance Department.
The Connecticut insurance statute regarding insurance deductibles
for auto glass coverage cited in the report reads as follows:
Comprehensive automobile coverage to include optional coverage
for repair or replacement of damaged safety glass without deductible
or minimum amount. Each automobile insurance policy providing
comprehensive coverage, whether designated as such or included
in a policy providing broader coverage, shall provide at the option
of the insured complete coverage for repair or replacement of
all damaged safety glass without regard to any deductible or minimum
To resolve this, in addition to the associated fines, the Connecticut
Insurance Department is requiring that the companies begin complying
with the statute, and "re-file these options with the Department."
According to information from the state, GEICO has said it will
comply with the state's orders and will submit a compliance report
to the commissioner within 90 days.
Other citations noted in the report include policy cancellations
(for example, policies being cancelled for non-payment without a
15-day notice); non-renewals of policies for reasons not listed
in the company's filed underwriting guidelines; failure to resolve
claims in a timely manner; failure to pay loss-of-use damages (when
the claimant was unable to use his/her vehicle) in certain instances;
and the use of unlicensed adjusters.
The fines break down as follows among the four GEICO subsidiaries
included in the report: GEICO Casualty Company, Maryland ($49,000);
GEICO General Insurance Company, Maryland ($31,500); GEICO Indemnity
Company, Maryland ($64,500); and Government Employees Insurance
Company, Maryland ($32,500).
"Connecticut statutes are in place to protect consumers, and
violations of these laws are unacceptable," says Connecticut's
insurance commissioner, Thomas R. Sullivan. "We will continue
to scrutinize companies in this industry to ensure they are committed
to conducting business within the boundaries of our insurance laws."
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