Thursday, September 18, 2014

Washington businesses refunded more than $1 million in overcharged commercial insurance rates

This month, Zurich North America insurance group completed reimbursing Washington businesses $1.02 million and more than $123,000 in interest on 568 commercial auto policies that had been overcharged.

In October 2013, the OIC took action against a handful of Zurich North America’s companies for overcharging Washington businesses for commercial auto insurance policies. The companies are American Zurich Insurance Co., American Guarantee & Liability Insurance Co., Colonial American Casualty & Surety Co., Fidelity & Deposit Co. of Maryland, Zurich American Insurance Co. of Illinois, and Zurich American Insurance Co. 

The companies agreed in a consent order to pay a $50,000 fine and to refund policyholders, including 8 percent interest, who overpaid based on the incorrect rates.

This month, we closed out the case when Zurich North America reported it had completed the terms of the agreement. The overcharges happened because the companies failed to notify the OIC that they were going to continue to use their old rates, rather than charging new rates filed on their behalf by an insurance rating organization they belonged to.