New York State
Insurance Department


NEW YORK STATE INSURANCE DEPARTMENT IMPOSES
MORE THAN $390,000 IN FINES AGAINST 11 INSURERS

New York, March 17, 1999

            Superintendent of Insurance Neil D. Levin today announced that the Department has taken disciplinary action against 11 insurers for various violations of New York Insurance Laws and regulations. The fines, totaling $393,875, are against the following insurers:

          Company Amount of Fine
  • First United American Life Insurance Company
  • GA Insurance Company of New York
  • CUNA Mutual Insurance Society
  • PG Insurance Company of New York
  • The MONY Group
  • Interboro Mutual Indemnity Company
  • Vytra Healthcare Long Island
  • Acceleration National Insurance Company
  • American Employers Insurance Company
  • Managed Healthcare Systems of New York
  • MagnaHealth of New York.
$95,000
$90,250
$70,000
$60,525
$25,000
$15,350
$15,250
$14,000
$ 5,750
$ 1,750
$ 1,000

Auto Insurance Violations

        GA Insurance Company of New York and PG Insurance Company of New York, both members of the General Accident Insurance Group, were fined $90,250 and $60,525, respectively. Market conduct investigations revealed that for certain automobile insurance claims handled between January 1997 and August 1997, the companies did not pay or deny claims in a timely manner and did not properly calculate interest due on overdue benefits. GA Insurance also neglected to include inspection reports and photographs in claim files when settling theft claims.

        GA Insurance and PG Insurance also failed to fully comply with the terms of a 1996 Department stipulation which required the companies to review total theft loss calculations and interest due on no-fault claims. The companies also failed to institute adequate procedures to reduce violations. PG Insurance, the State’s 14th largest auto insurer and GA Insurance, the State’s 15th largest, are based in Melville, New York.

        Interboro Mutual Indemnity Insurance Company, based in Mineola, New York, was fined $15,350. A market conduct investigation revealed that for certain automobile insurance claims handled between January 1997 and August 1997, the company did not pay or deny claims in a timely manner and did not properly calculate interest due on overdue benefits. Interboro Mutual Indemnity also failed to notify claimants of reimbursement rights for transportation expenses. The company is the 57th largest auto insurer in New York.

        Acceleration National Insurance Company was fined $14,000 for violations uncovered during a Department investigation of its public automobile insurance policies expiring February 28, 1999. The investigation revealed that the company failed to document specific criteria in its individual underwriting files. Acceleration National also violated flex-rating regulations by implementing rate changes beyond a specified band (for example, plus or minus 15%) without filing rate changes with the Department. In addition, the company failed to provide, at the option of the insured, Supplementary Uninsured Motorist (SUM) insurance coverage and failed to state on its declaration the SUM limits and the maximum amount payable under SUM coverage. The company is headquartered in Dublin, OH.

Property Insurance Violations

        American Employers Insurance Company was fined $5,750 after a Department market conduct investigation revealed that for certain commercial insurance policies issued or renewed between April 1997 and September 1997, the company failed to provide policyholders with specific reasons on its non-renewal notices. In addition, the company charged rates that had not been filed with the Department and failed to maintain certain risk information in underwriting files. American Employers also failed to deliver anti-arson applications to policyholders and failed to rescind the policy if completed anti-arson forms were not received within 45 days. The insurer is based in Boston, MA.

Life Insurance Violations

        First United American Insurance Company, based in Liverpool, NY, was fined $95,000 for failing to facilitate the Department’s examination of its records for the period 1994 through 1996. The company also failed to keep at its principal office its books of accounts and minutes of meetings of its board of directors. It was also determined that First United American entered into certain servicing transactions with its parent and affiliates without prior notification to the Department as required.

        An examination of the operations of CUNA Mutual Insurance Society revealed that during the period January 1990 through November 1997, the company exceeded the maximum limits when writing group credit life and group credit disability policies. The company also failed to implement a 1990 agreement it had with the Department to use specified language concerning maximum insurance amounts in its proposals it issued for credit unions dealing with group credit life and disability policies. CUNA Mutual, based in Madison, Wisconsin, was fined $70,000.

        The MONY Group, headquartered in New York City, was fined $25,000 after a Department examination of the company for the period 1992 through 1996 revealed that the company failed to pay interest on certain surrendered life insurance policies. The company also failed to maintain complete files with regard to the distribution of its advertisements. The company is the 19th largest life insurer in New York.


HMO Violations

        Three metro area HMOs have been fined for not filing their financial information with the Department on time. Vytra Healthcare Long Island, located in Melville, NY, was fined $15,250; Managed Health Care Systems of New York, located in New York City, was fined $1,750; and MagnaHealth of New York, based in Garden City, NY, was fined $1,000. The Department requires all insurers to file quarterly and annual financial information with the Department by a specified date.


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