California regulator settles with insurtech and underwriter over claims mishandling
California regulator settles with insurtech and underwriter over claims mishandling | Insurance Business America
Motor & Fleet
California regulator settles with insurtech and underwriter over claims mishandling
Underwriter will receive a fine of more than $2 million
Motor & Fleet
By
Kenneth Araullo
The California Department of Insurance has announced that it has reached two settlement agreements with Go Maps and its insurance underwriter, Topa Insurance, following an investigation into numerous complaints regarding mishandling of consumer claims for over two dozen drivers.
As per the terms of the agreement, Go Maps has consented to surrender its insurance license, pay a fine of $150,000, reimburse costs amounting to $50,000, and furnish the department with all necessary information to ensure compliance with statutory requirements concerning existing policyholders.
Topa, on the other hand, received a fine of $2,108,000 and committed to maintaining permanent access to all policies handled by future general agents, certifying the appropriate licensure of all general agents and associated entities, and refraining from seeking money from consumers who may have been undercharged due to rating errors in the Go Maps/Topa program.
Violations of Go Maps and Topa
Go Maps, functioning as an insurtech, utilized an app-based marketing platform to conduct its insurance business for Topa. It’s essential for insurtech companies and the insurance companies utilizing them for marketing and managing their products to adhere to California’s consumer protection laws, maintaining licensed and knowledgeable individuals to ensure proper insurance transactions within the state.
In 2019, Go Maps partnered with Topa to handle all functions necessary for the sale, service, management, and claims handling of Topa’s private passenger automobile policies sold to the public via the Go Maps app. At its peak, the Go Maps/Topa program boasted over 10,000 California customers, constituting the majority of its approximately 12,000 policies nationwide.
In June 2022, the California Department of Insurance acted against Go Maps and Topa to safeguard the public from further harm resulting from repeated violations of various consumer protection laws concerning insurance claims.
The failure of Go Maps and Topa to adhere to California’s consumer protection rules imposed financial burdens on drivers, compelling them to cover rental car expenses and other costs while their insurance claims were delayed. Among various violations, Go Maps and/or Topa:
Neglected to pay claims within 30 days post determination of coverage or settlement
Failed to acknowledge claims, provide necessary forms or instructions, or initiate investigations within the statutory 15-day requirement, surpassing the legal 15-day requirement by over eight days on average
Did not respond to consumers’ inquiries about their claims within 15 days, exceeding the legal 15-day requirement by an average of more than 11 days
Did not approve or deny claims within 40 days, surpassing the legal 40-day deadline by an average of more than 25 days
Employed an unlicensed insurance adjusting firm for claims adjustment
“These settlements represent an important victory for California consumers as we hold all companies accountable and ensure that they comply with our strong consumer protection laws,” Insurance Commissioner Ricardo Lara said. “While we encourage new products and innovation in our marketplace, our top priority is protecting policyholders and making sure insurance companies deliver on their promises.”
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