California Department Of Insurance Settles Enforcement Action Against Insurers Over Wildfire Claims Handling Practices
News: 2012 Press Release
The California Department of Insurance (CDI) today announced it has settled the Order to Show Cause, a Statement of Charges/Accusation, and a Notice of Monetary Penalty served against the New Hampshire Insurance Company and its authorized agent York Risk Services Group, Inc. for claims processing. The $285,000 settlement is a result of New Hampshire Insurance Company and York Services Group, Inc. handling of claims related to the 2008 Sayre Fire in Sylmar, California. New Hampshire Insurance Company is a subsidiary of AIG.
"I am committed to ensuring that insurers and administrators processing claims on consumers' behalf adhere to the requirements of the California Insurance Code," said Commissioner Dave Jones. "We expect insurers and their agents to be thoroughly diligent in handling claims, especially as a result of the devastating losses caused by the Sayre fire."
The Sayre Fire, which occurred on November 14, 2008, led to the loss of 489 residences, including 480 mobile homes, and the destruction of more than 600 structures overall. During the course of the fire, more than 11,000 acres were burned. In response, both the Mayor of Los Angeles and the Governor of California issued state of emergency declarations. The 480 mobile homes destroyed in the fire were located in the Oakridge Mobile Home Park, which before the fire, housed 600 mobile homes. The New Hampshire Insurance Company issued Mobile Homeowners Policies to approximately 370 policyholders whose homes suffered total losses as a result of the firestorm.
In 2009, CDI acted on complaints from Sayre Fire survivors relating to disputes over how much extended replacement cost coverage was available under the New Hampshire Insurance Company policy. CDI was able to secure an additional 110 percent or 125 percent of fire insurance coverage for most policyholders. This action resulted in approximately $10.8 million in increased payments to the Sylmar fire victims.
In the ensuing months, CDI's Claims Services Bureau received a number of complaints from New Hampshire Insurance Company policyholders regarding claims handling. The settlement action today is based on these alleged claims handling violations.
The New Hampshire Insurance Company stipulation and waiver is available to the public.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $289 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $394 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.