The California Department of Insurance (“CDI”) has issued an order to show cause, accusation, and notice of noncompliance charging Access Insurance Company and some of its affiliates with engaging in improper claims handling and improper rating and underwriting practices in violation of the California Insurance Code and the state's Fair Claims Settlement Regulations.
“Consumers should have confidence that anyone selling them insurance in California is complying with our consumer protection laws,” said California's insurance commissioner, Dave Jones. “Making sure insurance companies deliver on their promises to consumers is a critical part of the department's mission.”
In a statement, the CDI said that, in response to “numerous consumer complaints about Access' business practices,” the CDI launched an investigation that revealed over 40 different alleged statutory and regulatory violations, including misrepresentation of pertinent facts to claimants, failure to acknowledge and act reasonably promptly, and failure to adopt and implement reasonable standards for the prompt investigation and processing of claims arising under insurance policies.
The notice of noncompliance alleged that Access' rating plans, rating systems, rates and underwriting guidelines, and their implementation by Access and its affiliates violated California law for reasons including cancelling policies for reasons not permitted by law, failing to give appropriate discounts, and overcharging consumers for certain fees.
In addition to suspension of Access' certificate of authority, the order to show cause seeks monetary penalties against Access and its affiliates of up to $5,000 for each alleged violation, or if the act was willful, up to $10,000 and an order requiring Access to cease and desist from further engaging in methods, acts, or practices that are unfair and deceptive within the meaning of the Unfair Practices Act and Fair Claims Settlement Regulations.
The notice of noncompliance requires Access to correct any unlawful practices within 10 days of receiving the notice. For each allegation, Access also has to show proof of compliance or correction. The CDI pointed out that if Access fails to comply within the allotted time, it would set a public hearing and, if the commissioner were to find Access to be in violation, he may order payment of monetary penalties and other appropriate corrective action.
Learn more: Access documents.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].