Missouri insurance regulators announced a $1.2 million settlement agreement with nine AIG affiliated insurance companies after a market conduct examination into the companies’ handling of workers’ compensation insurance.
During the course of the examination, the department found that AIG insurance companies failed to file rate plans for large deductible workers’ compensation policies, regulators said.
Missouri state statute requires workers’ compensation insurers to file rates with the department.
“The filing of workers’ compensation rates provides rate transparency which is crucial for a competitive insurance marketplace, particularly for Missouri small businesses,” said Department of Insurance Director John M. Huff. “Rate transparency allows all businesses — large and small — to see what rates are charged by competing insurers in the workers’ compensation market.”
The settlement alleges that the companies failed to make individual risk filings with the department for 2,158 large deductible workers’ compensation insurance policies with Missouri premium or exposure.
They also failed to use mandatory forms, used withdrawn forms, erred in calculating the administrative surcharge rate and in collecting the administrative surcharge, incorrectly calculated the employer’s liability increased limits, incorrectly calculated the scheduled rating modification and failed to provide timely responses to some information requests.
Under the settlement agreement, AIG has agreed to take remedial action bringing them into compliance with statutes and regulations of Missouri. AIG will pay $1,250,000 to the Missouri State School Fund.
AIG also agreed as part of the settlement to account for payments made by policyholders to third party administrators for premium or charges for insurance in premium development for premium tax purposes on a prospective basis.
More than 320 insurance carriers actively compete in Missouri’s workers’ compensation market, the department said.
Since the beginning of 2009, Market Conduct enforcement actions have generated more than $36 million in payments from insurance companies. The money goes toward refunds for consumers, General Revenue and the Missouri State School Fund.
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