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Department of Insurance Recovers Nearly $700,000 in Fines through Company Compliance Exams

Captive | Captive Insurance | Insurance Commissioner | Date Posted: Monday, January 13, 2020


Official Seal of the Insurance Commissioner of Delaware

Investigations result in discovery and correction of issues impacting consumers

The Delaware Department of Insurance’s Market Conduct Examinations resulted in the receipt of nearly $700,000 in fines during 2019 from more than a dozen companies found to violate the Insurance Code or other related regulations. The fines are contributed to the General Fund, providing funding for state programs and services and reducing taxpayer burden.

“As the state’s largest consumer protection organization, the Department of Insurance takes company examinations very seriously. We don’t just fine a company and move on, we work to ensure that corrective action is completed to improve products and consumer experience while reducing future infractions.” said Commissioner Trinidad Navarro.

The department works to provide remediation requirements to ensure compliance with the Insurance Code and related regulations for violations such as excessive charges, failure to distribute required notices, improper licensing, failure to pay claims in a timely fashion, and other issues impacting consumers. Over 20 exams were completed by the department in 2019, and more than 55 are open or underway.

“It’s important that we emphasize that not all companies being fined are deliberately acting in bad faith,” said Deputy Commissioner Tanisha Merced. “Many companies are unaware of their violations before our team investigates, and act quickly to correct their actions and safeguard consumers.”

For example, LifeShield, whose financial penalty is pending, took immediate action upon release of the company’s examination, implementing positive changes for their customers, and their company as a whole. After thorough consideration, the company decided to cease issuance of new short-term medical insurance policies nationwide and engage a new administrator. It has also hired additional staff to mitigate the risk of future issues. While these actions will cost the company more than $100,000, there will be no impact to consumer premium costs.

“The Department of Insurance’s thorough review process shows how much they care for the wellbeing of Delaware residents, and we hope that our rapid response to their findings does the same,” LifeShield’s president remarked. “Compliance with laws and regulations is of critical importance to us, as is maintaining best practice as we seek to provide the products and services our customers want and need.”

The Department’s examiners conduct investigations of organizations and agents and participate in multi-state enforcement efforts to ensure the consumer safety of residents nationwide. While exams are conducted regularly, the Department also examines companies based on consumer complaints. When issues are discovered through the exam process, positive correction action, fines, and suspension of licenses can occur. In 2018, the Department collected $950,000 in fines. In some cases, where a company’s violations impacted individual customers, the Department will require companies to compensate residents directly.

The Department’s Market Conduct Enforcement Actions and Fines are available online as are all complete and final Market Conduct Examination Reports.

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Department of Insurance Recovers Nearly $700,000 in Fines through Company Compliance Exams

Captive | Captive Insurance | Insurance Commissioner | Date Posted: Monday, January 13, 2020


Official Seal of the Insurance Commissioner of Delaware

Investigations result in discovery and correction of issues impacting consumers

The Delaware Department of Insurance’s Market Conduct Examinations resulted in the receipt of nearly $700,000 in fines during 2019 from more than a dozen companies found to violate the Insurance Code or other related regulations. The fines are contributed to the General Fund, providing funding for state programs and services and reducing taxpayer burden.

“As the state’s largest consumer protection organization, the Department of Insurance takes company examinations very seriously. We don’t just fine a company and move on, we work to ensure that corrective action is completed to improve products and consumer experience while reducing future infractions.” said Commissioner Trinidad Navarro.

The department works to provide remediation requirements to ensure compliance with the Insurance Code and related regulations for violations such as excessive charges, failure to distribute required notices, improper licensing, failure to pay claims in a timely fashion, and other issues impacting consumers. Over 20 exams were completed by the department in 2019, and more than 55 are open or underway.

“It’s important that we emphasize that not all companies being fined are deliberately acting in bad faith,” said Deputy Commissioner Tanisha Merced. “Many companies are unaware of their violations before our team investigates, and act quickly to correct their actions and safeguard consumers.”

For example, LifeShield, whose financial penalty is pending, took immediate action upon release of the company’s examination, implementing positive changes for their customers, and their company as a whole. After thorough consideration, the company decided to cease issuance of new short-term medical insurance policies nationwide and engage a new administrator. It has also hired additional staff to mitigate the risk of future issues. While these actions will cost the company more than $100,000, there will be no impact to consumer premium costs.

“The Department of Insurance’s thorough review process shows how much they care for the wellbeing of Delaware residents, and we hope that our rapid response to their findings does the same,” LifeShield’s president remarked. “Compliance with laws and regulations is of critical importance to us, as is maintaining best practice as we seek to provide the products and services our customers want and need.”

The Department’s examiners conduct investigations of organizations and agents and participate in multi-state enforcement efforts to ensure the consumer safety of residents nationwide. While exams are conducted regularly, the Department also examines companies based on consumer complaints. When issues are discovered through the exam process, positive correction action, fines, and suspension of licenses can occur. In 2018, the Department collected $950,000 in fines. In some cases, where a company’s violations impacted individual customers, the Department will require companies to compensate residents directly.

The Department’s Market Conduct Enforcement Actions and Fines are available online as are all complete and final Market Conduct Examination Reports.

Tweet this story

image_printPrint

Related Topics:  , , ,


Graphic that represents delaware news on a mobile phone

Keep up to date by receiving a daily digest email, around noon, of current news release posts from state agencies on news.delaware.gov.

Here you can subscribe to future news updates.