Acting Pennsylvania Insurance Commissioner Teresa Millerannounced today that nearly 5,000 consumers in the state received$66.8 million in restitution payments or credits through therestoration of stolen funds, the payment of denied or underpaidclaims, and the refunding of overcharged premiums during the firstquarter of 2015.

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“My Administration is committed to protecting consumers acrossthe commonwealth,” said Governor Tom Wolf. “These types ofpredatory practices will not be tolerated on my watch. Familiesshould always get the coverage they deserve at the prices they haveagreed to pay.”

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“Pennsylvanians spend hard earned money to protect theirfamilies by purchasing many types of coverage, including life,home, auto, and health insurance. The state has a competitiveinsurance market, which is good for consumers, because competitionincreases options and holds down prices,” added Acting SecretaryMiller. “But, if a customer is victimized by an unscrupulousinsurance producer or an unfair business practice, the PA InsuranceDepartment will do everything possible to make that consumerwhole.”

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Four main areas of investigation

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Miller said 4,830 Pennsylvania consumers received restitutionpayments or credits in the first three months of 2015, primarily inthe following four main areas.

  • Restoration of stolen funds. The InsuranceDepartment investigated cases in which an insurance agent collecteda personal check or cash as payment for a policy or annuity, butnever sent that money to the insurance company, often stealing thecustomer’s money. In these instances, the department required theagent to repay the customer. If the agent couldn’t make thisrepayment, the insurance company for which the agent sold thepolicy is required to do so.
  • Processing and payment of previously denied orunderpaid claims. When an Insurance Departmentinvestigation found that a customer’s claim was inappropriatelydenied or only partially paid, the department required the companyto pay the claim as it should under the policy.
  • Refunding of overcharged premiums. Privateauto and homeowners insurers must, under Pennsylvania law, receiveprior approval from the Insurance Department for the rates theycharge. When an investigation found an insurance company was usingrates that were not approved, any premium payments above the ratethat would have been approved were returned to the customers eitherin refunds or credits to the policy premiums.
  • Making payments under a multi-state settlement withlife insurance companies. Pennsylvania participated in amulti-state examination of life insurance companies, resulting incompanies entering into settlement agreements requiring them toreform the way they do business for the benefit of policyholdersand beneficiaries across the country. Insurance regulatorsnationwide focused on the life insurance industry’s selective useof the Social Security Administration’s Death Master File (DMF),and found that although some companies properly used this file,others used it to terminate the payment of annuity benefits, whileat the same time failing to trigger the payment of life insurancepolicy benefits. Moving forward, life insurance companies that haveentered these settlement agreements will use the DMF to identifypotentially unpaid insurance benefits and search for beneficiariesto whom benefits might be due.

Miller urged anyone with concerns about insurance issues inPennsylvania to visit www.insurance.pa.gov, and clickon “Services for Consumers,” or call 1-877-881-6388.

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Rosalie Donlon

Rosalie Donlon is the editor in chief of ALM's insurance and tax publications, including NU Property & Casualty magazine and NU PropertyCasualty360.com. You can contact her at [email protected].