The New York Department of Financial Services says Rhode Island-based Narragansett Bay Insurance Company will pay a $327,400 penalty due to adjuster-inspection delays on Superstorm Sandy claims.
The DFS says its investigation uncovered that Narragansett "failed in numerous instances to perform adjuster inspections of damage related to Superstorm Sandy in the time frames required by law and regulation."
The DFS conducted its investigation in 2013 after policyholder complaints in which people complained of being unable to reach adjusters and said adjusters failed to show up to scheduled appointments.
A consent order between the DFS and NBIC says the insurer received over 10,000 Sandy claims in New York between Oct. 26, 2012 and Nov. 15, 2012.
The order says Regulation 64 requires insurers to "commence an investigation of any claim" within 15 business days. The department also promulgated an amendment to the regulation on Nov. 29, 2012 requiring that, for Sandy claims filed between Oct. 26 and Nov. 29, NBIC would have had to "commence an investigation" within the shorter of six business days after Nov. 29 or 15 business days of receiving notice of claim.
"In violation of Insurance Regulation 64 and the 12th amendment to Insurance Regulation 64, Narragansett in numerous instances failed to perform adjuster inspections for Sandy claims in the required time frames," states the order.
In addition to the penalty, the order says NBIC must enact controls to ensure it can successfully process catastrophe claims within the required time frames. The controls include improving systems and procedures so the insurer can "adequately respond to a catastrophe that produces up to 30,000 total claims," and improving telephone systems and call centers to handle a high volume of activity.
Insurer accepts penalty; disagrees with findings
NBIC says it cooperated with the DFS in the investigation and accepts the conclusion in order to move beyond the matter, but adds it does not agree with the findings.
NBIC says more than 95% of claims filed were closed within 120 days, and points out the company "was not cited for incorrectly denying, delaying payment or underpaying any claims." The insurer says the Independent Insurance Agents and Brokers of New York recognized it for "having performed extremely well in Superstorm Sandy."
The insurer further states the DFS website shows 244 complaints against it, with 67 of the complaints relating to flood coverage, which NBIC does not provide.
NBIC also says there are no ongoing regulatory reviews in other Sandy-impacted states in which it does business.
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