The Illinois Department of Insurance fines Applied Underwriters Inc. and its subsidiary Continental Indemnity Co. to a $ 250,000 fine for selling compensation policies for unapproved workers to small businesses in the state, the department announced Tuesday.
The department conducted a market research of former Berkshire Hathaway Inc.-owned Applied Underwriters and Continental, and determined that the companies marketed and sold approved employees' policies, packed with side agreements, in violation of Illinois law.
The department claimed that companies sold reinsurance contracts on participation as part of their workers compose insurance to small businesses without state approval, and found that the packaging of RPA with the insurance wanted policyholders "to take full risk, effectively insure themselves and lead to the policyholders paid more for the insurance part of the package than for the workers' policy itself.
The departures t also said that RPA lacked standard premium amount information, charged penalties for cancellations and used "complex and confusing cost calculations.
As part of the settlement with Illinois, Continental and Applied no longer sell RPA in the state and have agreed to submit new insurance products and rates to the insurance department.
Applicants have paid fines for selling similar products in California, New Jersey and New York and are currently in a court battle with the State of California and its insurance. that the state placed the applied subsidiary California Insurance Co. under conservatory in November 201