In what Florida Insurance Commissioner Kevin McCarty deemed "truly a victory for Florida's consumers and businesses," AIG Insurance Company (AIG) settled charges that it failed to justify rates or used excessive and unfairly discriminatory rates on coverage required by the federal Terrorism Risk Insurance Act.
Under the consent order, AIG must refund or credit approximately $13.6 million in workers' compensation, and approximately $100,000 in non-workers' compensation lines – plus interest – to policyholders in Florida.AIG also will be required to pay $300,000 to the Florida Office of Insurance Regulation for costs and fees related to the late-September settlement.
"Regardless of whether it is a small carrier or an industry giant like AIG, we will remain vigilant to assure that Floridians are not charged improper insurance rates," McCarty said.
The excessive charges were for workers' compensation, fire and allied lines, commercial property, surety, commercial automobile, and general liability terrorism insurance coverage. The overwhelming bulk of the settlement came from the workers' compensation terrorism coverage.
The refunds and credits will accumulate from the date AIG started charging the rates filed with the OIR (a period beginning January 2003 through March 2004) through the date in which a credit or refund is issued, plus interest. All refunds must be made within one year from the date of issuance of the order.
The filings subject to the order were all made under the use-and-file provisions under the Florida statute that allows the company to begin collecting premiums prior to and while the filing is being reviewed by the OIR, and while it is be-ing challenged. If the filing is ultimately disapproved, any improperly collected premium must be refunded.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.