New York State
Insurance Department

Consumer Complaints Triggered An Investigation

New York, January 28, 1999

Superintendent of Insurance Neil D. Levin today announced that Country-Wide Insurance Company has been fined $425,875 for failing to respond fairly and expeditiously to consumers’ auto insurance claims.

"This Department examines all consumer complaints and aggressively investigates any insurance company that generates a pattern of complaints. It is unacceptable that Country-Wide has ranked last in our annual auto insurance complaint ranking three years in a row," said Levin. "We will not tolerate this kind of behavior and will continue to take action against this company and others who fail to comply with our insurance laws and regulations."

For the past three years, Country-Wide ranked last in the Department’s annual ranking of auto insurance companies – meaning that the company, based on its size, had the most complaints from policyholders than any other comparable company. In response to the rise in consumer complaints, a Department market conduct investigation randomly sampled the company’s 1996 claims. The investigation revealed that the company failed to forward no-fault applications to consumers within five business days, failed to pay or deny claims in a timely manner, and failed to pay proper interest on overdue mandatory personal injury protection benefits. The company was fined $105,520 in 1995 for similar violations.

A separate investigation revealed that the company exceeded the maximum number of private passenger automobile non-renewals permitted for that year. A company is only allowed to nonrenew up to 2% of its business in a given territory. Country-Wide has since made up for these excess nonrenewals. In addition to the fine, the Department required Country-Wide to appoint a Chief Compliance Officer and to ensure future compliance with laws intended to protect consumers. As a result, the company hired an independent consulting firm to review compliance procedures and make recommendations. Country-Wide’s Internal Audit Department must also expand the scope of its examinations to include regulatory compliance and report periodically on its progress to the Insurance Department on implementing these enhanced compliance procedures.

Country-Wide, headquartered in Manhattan, writes only in New York State and wrote $62.2 million in direct premiums in 1997.

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