Fines Proposed for Insurers’ Improper Activity in the Aftermath of 2020 Hurricanes in Louisiana

Louisiana – Louisiana Insurance Commissioner Jim Donelon has proposed fining five homeowners insurance companies a total of $764,750 after conducting targeted market conduct examinations of their insurance activities between August 27, 2020, and June 30, 2021, when hurricanes Laura, Delta, and Zeta made landfall in Louisiana.

The five audits discovered 44 instances of illegal activities and/or business practices that were not in accordance with the Louisiana Insurance Code. There were violations in the areas of claims processing, complaint processing, and operations and management.

United Property & Casualty Insurance Company, GeoVera Specialty Insurance Company, FedNat Insurance Company, Maison Insurance Company, and Allied Trust Insurance Company are the five companies for which the LDI has proposed fines. Risk & Regulatory Consulting, LLC was hired by the LDI to assist with the examination. On April 11, 2022, all five examination reports were approved.

“The devastation and impact of the 2020 hurricane season was overwhelming, but that doesn’t excuse the activities we discovered in our market conduct examinations of these five insurers,” said Commissioner Donelon. “I strongly encourage our state’s insurance industry to take note of the unacceptable behavior we found and know we will continue to pursue appropriate fines and regulatory action against any insurer that is not meeting their obligations.”

United Property & Casualty has been proposed a $250,000 fine after the examination discovered ten instances of improper activities and/or business practices, including failing to conduct an on-site review of its managing general agent’s underwriting and claims processing operations; forcing policyholders to pursue litigation to recover amounts due under their insurance policy; and failing to make payment within the required timeframe following the submission of satisfactory pro forma claims. The examination report contains a detailed description of the violations.

The examination discovered 9 instances of improper activities and/or business practices, including failing to make payment within the required timeframe following the submission of satisfactory proof of loss; using multiple desk adjusters in a way that delayed the claim investigation and settlement; and other violations. The examination report contains a detailed description of the violations.

FedNat faces a $173,500 fine after the investigation discovered ten instances of improper activities and/or business practices, including failing to make payment within the required timeframe following the submission of satisfactory proof of loss; using multiple desk adjusters in a way that delayed the claim investigation and settlement; and other violations. The examination report contains a detailed description of the violations.

Maison faces a $115,000 fine after the investigation discovered 5 instances of improper activities and/or business practices, including failing to make payment within the required timeframe following the submission of satisfactory proof of loss; using multiple desk adjusters in a way that delayed the claim investigation and settlement; and other violations. The examination report contains a detailed description of the violations.

The examination discovered ten instances of improper activities and/or business practices at Allied Trust, including failing to make payment within the required timeframe following the submission of satisfactory proof of loss; failing to respond to claim inquiries and requests within 14 days; and other violations. The examination report contains a detailed description of the violations.

Companies have 30 days from the date of the adopted examination report to file an appeal with the LDI.

If you believe your insurer is not treating you fairly, call the LDI Office of Consumer Services at 1-800-259-5300, option 3, or file a complaint online at ldi.la.gov/fileacomplaint.

Commissioner Donelon also encourages consumers to contact the LDI Insurance Fraud Division at 225-342-4956 or 1-800-259-5300 if they have any concerns about an insurance-related transaction. Callers who do not want their names used can request that their participation be kept private.