California insurance commissioner demands auto insurers submit refund data

State insurance department to assess whether companies have to reimburse more; failure to comply will result in legal action

California insurance commissioner demands auto insurers submit refund data

Insurance News

By Lyle Adriano

A month after he ordered three insurers to submit additional auto insurance refund data, California Insurance Commissioner Ricardo Lara has expanded his edict to include other insurers operating in the state.

Last month, Lara ordered Allstate, CSAA, and Mercury Insurance to submit all data they have related to the auto insurance premium refunds they gave back to customers over the COVID-19 pandemic shutdowns. According to the California Department of Insurance (CDI), the three insurers – which collectively insure approximately 20% of all California drivers – have the greatest gap between what they initially refunded drivers and the amount they should have refunded consumers. From March to September 2020, insurers returned on average 9% of auto premiums, but CDI noted that based on its analysis, insurers should have refunded nearly double that amount – 17% – over the seven-month period.

Lara gave the three companies 30 days to submit their refund data or risk facing legal action.

The three submitted their data to Lara and the CDI within the month, which the insurance commissioner has favorably commented on in a recent release.

“My top priority is protecting consumers. Allstate, Mercury, and CSAA have responded to my order by turning over data on the premium refunds they provided to policyholders and their claims experience during the pandemic period,” said Lara. “My department will evaluate the data and determine how much in additional premiums each insurance company owes their policyholders.”

The commissioner made clear in his statement that he would continue to put consumers first.

“I have been clear that half-measures and incomplete actions aren’t enough,” Lara said. “My goal is to have an accurate and fair determination of what each insurance company’s appropriate amount of premium refund should be. In this matter, and in all matters before us, we will continue to hold insurance companies accountable and protect consumers.”

Lara also commented that his edict is now entering a new “phase,” which calls for all auto insurance companies operating in California to participate in the data submission.

“This new phase represents a last and final warning to other insurance companies that have not adequately returned premiums to consumers. These companies must provide policyholders with a commensurable data-driven amount of additional premium refunds and promptly report their actions,” the commissioner mentioned.

“We are prepared to take any and all actions necessary to ensure consumers are treated fairly.”

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