The Department of Insurance announced that Homesite Insurance Company has agreed to pay a penalty of $350,000, and refund $10,522 in premium overcharges to over 70 California policyholders.
“Ensuring that insurance companies are conducting business according to all laws and regulations, and in a responsible, fair and consistent manner is essential in our effort to protect consumers and maintain confidence in the insurance industry,” said Commissioner Jones. “This case is a good example of why market conduct examinations are an important part of what we do to protect consumers.”
According to department examiners, Homesite improperly used property inspection information in rating and underwriting policies as well as misrepresented how property inspection information would be used. Additionally, Homesite did not collect all underwriting information required by law and used loss history reports improperly and used replacement cost calculation software incorrectly when performing replacement cost calculations. The insurer also failed to respond in a timely manner to department inquiries regarding insurance claims.
Homesite agreed to correct all issues identified in the exam report. Homesite writes less than one percent of homeowners’ insurance policies in California. The enforcement action resulted from a routine exam by the Field Rating and Underwriting Bureau of the insurer’s rating and underwriting practices for the period between May 1, 2008 and July 31, 2008.
Source: California Department of Insurance
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