N.Y. to Examine 3 Insurers for Sandy Claims Practices

New York Gov. Andrew Cuomo announced on Feb. 21 that the state’s Department of Financial Services is investigating the claims practices of three insurers following the aftermath of Sandy.

The three insurers are: Narragansett Bay Insurance Company, Tower Insurance Company and Kingstone Insurance Company. The regulators said these insurers have had a “much higher than average” consumer complaints rate.

The regulators said the insurers are being investigated for (1) failure to send adjusters in a timely manner, (2) failure to process claims in a timely manner, or (3) inability of homeowners to contact insurance company representatives.

Naragansett Bay received 11,056 Sandy claims in New York. Among them, 8,969 claims closed with payment and 1,352 claims closed without payment as of Feb. 22. It had 150 consumer complaints, according to data released by regulators. Tower Group received 16,835 Sandy claims in New York. Among them, 10,980 claims closed with payment and 4,822 claims closed without payment as of Feb. 22. It had 254 consumer complaints. Tower Insurance Company is a member of Tower Group. Kingston’s claims information was not included in the data.

Tower Insurance strongly objected to regulators’ allegations and stated that the company has already refuted such allegations once before. Tower Insurance said that on Jan. 18, 2013, the company received a letter from the department reciting alleged claims handling violations and requesting Sandy claims data.

“Tower responded promptly to the request, and on Jan 31, 2013, the company provided voluminous information that refutes any factual basis for the allegations contained in the Jan. 18 letter. To date, Tower has received no further correspondence from the department regarding the data we submitted,” the company told Insurance Journal on Feb. 22. The alleged claims handling violations listed in the Jan. 18 letter that have already been refuted by the insurer are the same allegations made in February, the company said.

“We emphatically reject the allegations set forth in the DFS’s letter and Governor’s press release,” the company said. “To date, we have closed over 95 percent of personal auto and homeowner Sandy-related claims. So far, Tower Insurance Company of New York and its affiliated entities have paid out more than $160 million in claims payments to businesses and individuals.”

Narragansett Bay stated it has responded to all requests for information from regulators. “We believe discussions with the department have been productive, and we look forward to continuing our posture of cooperation with them as they continue their review,” the insurer said. Kingstone was not immediately available for comment.

Topics Carriers New York Claims