Chicago Area Auto Insurer Fined

Springfield, IL - Illinois Insurance Director Mark Boozell has issued a Stipulation and Consent Order and fine to another Chicago area auto insurance company. Universal Casualty Company, Niles, IL, received a $125,000 fine for improper claims practices identified in a market conduct examination. Most of the insurance code violations cited involved total loss claims, including:

• failure to settle total loss claims in a timely manner;
• underpaying on total loss vehicles; and
• failure to document reimbursement for sales taxes and transfer fees in total loss settlements.

The regulatory order also requires the company to institute procedures to reduce its complaint ratio to 9.0 or less per million dollars of premium written in Illinois. Universal Casualty's 1996 complaint ratio was 11.97, the worst among companies writing auto insurance.

Universal must pay $50,000 of its fine by September 28, 1997. The remaining $75,000 will be due if a follow-up examination reveals that the company has failed to comply with the Order. The re-examination will commence on or after August 1, 1998.

"Our regulatory action against Universal Casualty is a continuation of our crackdown on insurance companies with high levels of complaints," Boozell said. "There is no excuse for shoddy treatment of policyholders."