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Press Release - November 26, 2012
 
STATE OF OHIO
DEPARTMENT OF INSURANCE
COMMUNICATIONS OFFICE
 
 

11/26/2012

Taylor Announces $39 Million Settlement Following Multi-State Exam Initiated by the Ohio Department of Insurance


 


COLUMBUS Lieutenant Governor and Department of Insurance Director Mary Taylor today announced a settlement between National Union Fire Insurance Company of Pittsburgh, PA (NUFIC) and several lead state insurance regulators including the Ohio Department of Insurance. The agreement was reached following a multi-state examination (MSE) and requires NUFIC to pay an initial fine of $39 million to state regulators for a number of failures that compromised consumer protection. 

"Because of our initial exam and continued efforts throughout this entire process, we have helped reach a strong settlement for consumers across the country,” Taylor said. “Our review found the company’s practices were severely compromising consumer protection. Some steps have already been taken, but this agreement will ensure the company continues to make much needed reforms moving forward."

State regulators will split the $39 million settlement agreed to by NUFIC. Ohio’s share will be at least $1.3 million, plus an additional $100,000 fee for serving as a lead state regulator during the MSE.

An initial examination opened by the Ohio Department of Insurance led to discoveries prompting the MSE.  Some of the problems identified by Ohio and other lead states regarding accident and health insurance related business include;  product development, rate and form filings, and marketing; actuarial procedures and premium allocation; licensing of agents and claims personnel; claims processing; vendor oversight; training of personnel; handling of consumer complaints; use of trusts, record retention, IT issues, among others.

As a result, the settlement with NUFIC also requires change to its practices through a Corrective Action Plan (CAP). Should the terms of the CAP not be met, additional administrative penalties could be levied by state regulators. The company will undergo a two year monitoring period with state regulators as part of the settlement. At the end of the monitoring period, a comprehensive market conduct examination will be conducted. 

NUFIC is a Pennsylvania domiciled company and is a part of the AIG group and its direct parent is Chartis, Inc.

 


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The State of Ohio is an Equal Opportunity Employer

Ohio Department of Insurance
50 W. Town Street, Third Floor - Suite 300
Columbus, Ohio  43215
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John Kasich, Governor | Mary Taylor, Lt. Governor / Director
General Info: 614-644-2658 | Consumer Hotline: 800-686-1526
Fraud Hotline: 800-686-1527 | OSHIIP Hotline: 800-686-1578