Calif.: Hartford Charged Illegal Fees

The California Department of Insurance has initiated administrative legal proceedings against The Hartford Insurance Group alleging the company charged commercial and personal lines policyholders illegal fees, the department said.

Also under investigation "for similar infractions" are several other general agents and insurers, the department revealed.

The complaint against The Hartford charges the company allowed the Irvine-based Superior Access Insurance Services broker-agent to charge and collect fees not approved by the Department of Insurance.

According to the department, thousands of policyholders probably paid added fees around $100 per policy for workers' compensation and businessowner package policies.

Hartford spokeswoman Shannon Lapierre said the agency in question charged the fees without authorization from The Hartford, and the company is working with department officials to try and resolve the matter.

Insurance Commissioner John Garamendi said rates must be approved by the department under Proposition 103 and other statutes. "These laws are intended to protect consumers against all types of fraud, and I intend to actively enforce them to their fullest extent," he added.

The insurance department said it is contending that Superior Access added the unapproved fees to the premium Hartford was allowed to charge by law, with Hartford's knowledge.

According to the department, although Hartford did not actually receive the fees, California law treats the fees as if Hartford did receive them, since they were received by Superior Access as Hartford's agent.

The action against the Hartford, Conn.-based carrier was filed as a departmental action and either party can request a hearing before an administrative law judge, a department spokeswoman said.