Liberty Mutual agrees to repay over $7 million to Minnesota policyholders
Liberty Mutual agrees to repay over $7 million to Minnesota policyholders | Insurance Business America
Insurance News
Liberty Mutual agrees to repay over $7 million to Minnesota policyholders
Insurance giant agrees to repay over $7 million to policyholders
Insurance News
By
Mika Pangilinan
Liberty Mutual has agreed to pay around $7.7 million to over 86,000 policyholders for auto and homeowner insurance policies as part of a consent order with the Minnesota Department of Commerce.
The order was issued after the insurer was investigated for allegations that it violated state regulation laws.
Minnesota’s Department of Commerce had alleged that Liberty Mutual failed to offer the minimum antitheft protection device discount for auto insurance policies, used applicants’ status as a residential tenant to establish multi-policy discounts, and applied an automated rate increase that violated regulations for auto insurance policies.
According to the department, Liberty Mutual has already refunded or credited over $2.27 million to a total of 53,604 current and former policyholders, averaging $42.41 per policyholder
The company has also initiated the process of refunding or crediting approximately 7,700 current and former policyholders a projected sum of $2.7 million, averaging $350.65 per policyholder.
Furthermore, it is set to issue $2.1 million in credits and $670,000 in refunds to around 11,800 current policyholders (averaging $177.96 each) and 8,700 former policyholders (averaging $77.01 each).
The consent order involves Liberty Mutual Insurance Company, as well as other Liberty Mutual subsidiaries licensed to conduct business in Minnesota. It includes a civil penalty of $150,000, which will be stayed as long the insurer fully complies with its terms and conditions.
“When consumers pay premiums for insurance policies, they are protected by state law to ensure they get what they pay for,” said Minnesota commerce commissioner Grace Arnold. “This case demonstrates [the department’s] work to protect consumers and also ensure a fair and equitable marketplace.”
Last week, Liberty Mutual announced that it will be cutting around 850 jobs in a move that it referred to as a “company transformation initiative.”
“We have made the difficult decision to eliminate approximately 850 positions, nearly all in the US, across several functions this month, many of which are effective by the end of the year,” a spokesperson said in a statement to Insurance Business.
What are your thoughts on this story? Feel free to comment below.
Related Stories
Keep up with the latest news and events
Join our mailing list, it’s free!
