Commissioner Announces Multi-State Settlement with Company
Iowa served as lead state in agreement
DES MOINES, IOWA November 21, 2012 - Commissioner Susan Voss announced today that a team of regulators led by Iowa and Ohio has entered into a Regulatory Settlement Agreement (RSA) with National Union Fire Insurance Company (NUFIC), an AIG company. These two states, along with three other lead states: Pennsylvania, New Jersey and Minnesota will administer the settlement and monitor the company’s activities over the next two years. A total of 41 states have joined the agreement to date. States have until November 29, 2012 to join the settlement.
Susan Voss said, ”We’re pleased to have come to this agreement between the company and so many of our states’ regulators. The settlement is fair and provides for continuing oversight of the company to assure the protection of consumers.”
The settlement was a result of a review of company practices related to the sale of accident and health insurance for 2009 and 2010. The agreement establishes corrective actions and levies a substantial fine which will be distributed among the participating states.
Under the agreement, the RSA imposes an initial fine of $39 million. The company will add $1 million to the fine for each additional State that joins the agreement, up to a total of $51 million. The fine will be distributed according to a formula based on premium. As of today, 41 states have joined the agreement. Iowa will receive approximately $460,000 to $540,000, depending on the final number of states joining in the agreement
In addition, NUFIC is required to develop a plan that will concentrate on improvements in 13 areas of company operations. During the first six months of the two-year monitoring period, the company must meet specific deadlines for implementing required changes in business practices. If the company fails to implement the changes it faces additional fines of up to $21 million.
A comprehensive market conduct examination will be conducted at the end of the monitoring period. Additional fines may be imposed. If the ongoing monitoring by the Lead States reveals serious problems with compliance, the examination may be commenced sooner.
About the Iowa Insurance Division
The Iowa Insurance Division (IID) has general control, supervision and direction over all insurance and securities business transacted in the state, and enforces Iowa’s laws and regulations. The IID investigates consumer complaints and prosecutes companies, agents and brokers engaging in unfair trade practices. Consumers with insurance or securities-related questions or complaints may contact the IID toll free at 877-955-1212 or visit the Division on the web at www.iid.state.ia.us.