New York State
Insurance Department


ISSUED 12/9/2004

FOR IMMEDIATE RELEASE

LONG ISLAND FIREFIGHTERS MOVE TO PROTECT HOMEOWNERS' INSURANCE POLICIES THAT WERE INCORRECTLY NON-RENEWED

        New York Superintendent of Insurance Gregory V. Serio today announced that the Balboa Insurance Company has agreed to initiate immediately training for all of their company’s underwriters in the wake of an on-going New York State Insurance Department investigation into Balboa’s improper non-renewing of insurance policies for homes protected by volunteer fire departments. The company is cooperating in this broadening review of practices utilized by their underwriters to determine the full extent of the problem associated with these non-renewals.

        The Firemen’s Association of the State of New York (FASNY) and the Town of Babylon Fire Chiefs Association reported to the Insurance Department in October 2004 that Balboa had non-renewed a homeowner’s insurance policy on a Coram, NY (Suffolk County) residence because the property is protected by a volunteer fire department. The Department’s Consumer Services Bureau launched an immediate investigation and quickly found that other non-renewals had been issued improperly by the company on Long Island for the same reason.

        "Balboa’s actions were clearly a slap to all the dedicated volunteer firefighters of Long Island and throughout the State who selflessly provide professional-level firefighting and emergency medical services to the vast majority of our communities on their own time," Superintendent Serio said. "Balboa’s senior management team, once told of the problem by the Insurance Department and FASNY, quickly recognized the errors committed by their company’s underwriters, and have worked cooperatively with the Department to rectify the situation," Serio continued.

        In addition to the improper non-renewal of coverage in Coram, problems were also detected in policies non-renewed on Long Island properties in Commack, Deer Park, Farmingdale and Stewart Manor. Similar irregularities in non-renewals were also found recently in some California policies and the New York State Insurance Department has been sharing its findings with California's Insurance Commissioner, John Garamendi. Moreover, the New York State Insurance Department has directed Balboa to review all of its New York underwriting records dating back to 2001 to determine if other improper non-renewal notices were issued.

        "The Insurance Department appreciates the vigilance of the Babylon Town chiefs and the Firemen’s Association in discovering this problem and promptly bringing it to this agency's attention," Superintendent Serio said. "We thank them for their service."

        Balboa Insurance Company, a Santa Ana, California-based insurance group, has provided offers of renewal of homeowners insurance to those Long Island properties improperly cancelled from coverage, as directed by the Insurance Department, in addition to agreeing to the training for its underwriters. The Department will also be canvassing other carriers writing homeowner’s insurance coverage to determine if they are also using the issue of volunteer firefighter protection as a basis for non-renewing coverage. The investigation is continuing.

        Homeowners that have their insurance policy non-renewed for reasons they believe to be incorrect or inappropriate, including cancellation because of fire protection being provided by volunteers, are strongly encouraged to contact the Insurance Department's Consumer Services Bureau through its toll-free telephone number at 1-800-342-3736 or file a written complaint electronically by logging onto http://www.ins.state.ny.us, and clicking on the 'Consumers' icon. Hard-copy correspondence should be addressed to the New York State Insurance Department, Consumer Services Bureau, 25 Beaver Street, New York, NY 10004.


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