Pennsylvania Reports Record $31.4M in Fines, Restitution in 2012

During 2012, insurers were fined $18 million and restitution payments for consumers totaled $13.4 million in what amounted to be a record year for Pennsylvanians, state regulators reported this week.

In 2011, the Pennsylvania Insurance Department (PID) tallied $755,000 in fines and $1,782,396 in restitution. No breakdown between auto coverage and other lines of coverage were available for either year.

There are insurance departments for each state across the U.S. with regulators who field questions about coverage, recover funds for consumers related to claims disputes, investigate complaints brought by consumers and conduct examinations of insurers that often yield fines against companies found to be violating laws.

Pennsylvania led 10 multi-state insurance examinations last year that were “the main reasons for the uptick in the dollar amounts” between 2011 and 2012, according to Melissa Fox, spokeswoman for the PID.

Regulators across several states conducted an examination of American International Group (AIG) that resulted in the PID’s “largest-ever single amount in fines and assessments,” with a $16.8 million penalty, $8.6 million in fines, $4.6 million in premium taxes and a $3.6 million contribution to the Workers’ Compensation Security Fund.

Five of the other multi-state examinations involved life insurers and how they handled claims, according to Pennsylvania regulators.

In 2012, the PID reported that its Office of Market Regulation (OMR) responded to more than 13,000 written consumer complaints. The OMR also revoked or suspended licenses of about 70 people.

PID Commissioner Mike Consedine said that his department seeks to ensure that “consumers are served on a fair and level playing field.”

“When department licensees violate our laws, we will take action and hold them accountable,” he said in a statement.

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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