Louisiana Insurance Commissioner Jim Donelon has reviewed the insurance behavior of five insurance companies. As a result of these investigations into targeted market behavior, he has proposed significant fines. Louisiana Department of Insurance News Release announcing these fines partially noted:
Insurance Commissioner Jim Donelon has proposed fining five homeowners’ insurance companies a total of $ 764,750 after targeted market research of their insurance business between August 27, 2020 and June 30, 2021, a period when Hurricanes Laura, Delta and Zeta landed in Louisiana.
The five investigations found 44 cases of inappropriate activity and / or business practices that did not comply with the Louisiana Insurance Code. Violations were found in the areas of claims handling, complaint handling and operations and management.
The five companies for which LDI has proposed fines are United Property & Casualty Insurance Company, GeoVera Specialty Insurance Company, FedNat Insurance Company, Maison Insurance Company and Allied Trust Insurance Company. LDI hired Risk & Regulatory Consulting, LLC to assist with the investigation. All five audit reports were adopted on April 11, 2022.
“The devastation and effects of the hurricane season 2020 were overwhelming, but that does not excuse the activities we discovered in our market research of these five insurance companies,” said Commissioner Donelon. “I strongly encourage our state’s insurance industry to note the unacceptable behavior we have found and know that we will continue to take appropriate fines and regulatory action against all insurers who fail to meet their obligations.”
When I read the results of the survey, I noticed that the companies did not agree with all the results. This is not a complete regulatory process. It is also difficult to know how the fines were determined just by reading the surveys.
These market research is a file review without getting the taste of all the evidence from the policyholder’s perspective. The reviewers do not track down the previous Cat adjusters and interview them. The incorrect claim handling results mainly concerned delays. These were often caused by several adjusters being reallocated to a requirement and the new adjuster not following up communication and payment. I encourage readers of this blog to read at least one of the surveys, which are linked in the release.
I also noticed that none of these companies are doing well financially. Our company has litigation against several of them due to underpaid and delayed claims payments. I get worried when insurance companies are struggling financially and wonder if the late and underpaid claims are caused by these financial strains.
Even very ordinary people can, on closer inspection, often look extraordinary.
– Holly Hunter