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Regulatory Actions for July 1998

Legal Action - Agents

• Willie G. Brown, St. Charles, MO, license revoked for failure to respond to an investigatory subpena, untrustworthiness and incompetence.
• James J. Gales, Eau Claire, WI, license revoked for other state's action, failure to respond to a complaint, and failure to notify the department of an address change.

Legal Action - Companies

• Allstate Insurance Co., Northbrook, IL, $100 forfeiture for failure to respond to a complaint.
• American Eagle Insurance Co., Dallas, TX, certificate of authority revoked for other state's action and notice of financial impairment from another state.
• American States Insurance Co., Indianapolis, IN, $100 forfeiture for failure to respond to a complaint.
• Anthem Health & Life Insurance Co., Indianapolis, IN, $100 forfeiture for failure to respond to a complaint.
• Banker Life and Casualty Co., Chicago, IL, $100 forfeiture for failure to respond to a complaint.
• Citizens Insurance Co. of America, Worcester, MA, $1,000 forfeiture for filing faulty statistical data.
• Guarantee Life Insurance Co., Omaha, NE, $100 forfeiture for failure to respond to a complaint.
• Hanover Insurance Co., Worcester, MA, $1,000 forfeiture for filing faulty statistical data.
• Humana Insurance Co., Kansas City, MO, $100 forfeiture for failure to respond to a complaint.
• Humana Kansas City Inc., Kansas City, MO, $100 forfeiture for failure to respond to a complaint.
• IGF Insurance Co., Indianapolis, IN, $1,000 forfeiture for filing faulty statistical data.
• Massachusetts Bay Insurance Co., Worcester, MA, $1,000 forfeiture for filing faulty statistical data.
• State Automobile Mutual Insurance Co., Columbus, OH, $1,000 forfeiture for filing faulty statistical data.
• State Auto National Insurance Co., Columbus, OH, $1,000 forfeiture for filing faulty statistical data.
• State Auto Property & Casualty Insurance Co., Columbus, OH, $1,000 forfeiture for filing faulty statistical data.
• Unicare Life and Health Insurance Co., Wilmington, DE, $100 forfeiture for failure to respond to a complaint.
• Vanliner Insurance Co., Phoenix, AZ, $100 forfeiture for failure to respond to a complaint.

Financial Exams

• AGC Life Insurance Co., Nashville, TN
• Business Men's Assurance, Kansas City, MO
• Capital Reserve Life Insurance Co., Jefferson City, MO
• First American Insurance Co., Kansas City, MO
• Lincoln County Farmers Mutual Fire & Lightning Insurance Co., Troy, MO
• Kansas City Fire & Marine Insurance Co., Chicago, IL

Company Changes

• American Merchants Life Insurance Co., Jacksonville, IL, redomesticated from Florida to Illinois.
• Atlanta Specialty Insurance Co., Norcross, GA, redomesticated from Iowa to Georgia.
• Benefit Claims Payors, Inc., Phoenix, AZ, was admitted as a third party administrator.
• Brownguard Association of Delaware, Inc., Bay Shore, NY, was registered as a purchasing agent.
• Colonia Insurance Co., New York, NY, changed its name to AXA Global Risks US Insurance Co.
• Custom Realty Purchasing Group Association, Chicago, IL, was registered as a purchasing agent.
• Farmers Mutual Fire Insurance Co. of St. Francois County, Farmington, MO, was approved as part II Missouri mutual with fire, windstorm and liability authority.
• Funeral Directors Planning Group, Inc., Warwick, RI, was registered as a purchasing agent.
• Halcyon Insurance Co., Mayfield Village, OH, was admitted with liability authority.
• Mercer County Mutual Insurance Co., Princeton, MO, changed its name to The North Missouri Mutual Insurance Co.
• Nations Title Insurance Co., Tustin, CA, merged with Fidelity National Title Insurance Co.
• Poe & Associates of Illinois Inc. dba Insurance Administration Center, Tampa, FL, withdrew as a third party administrator.
• Quadrant Indemnity Co, Simsbury, CT, was admitted with property, liability, fidelity and surety, accident and health, and miscellaneous authority.
• QualMed Health & Life Insurance Co., Pueblo, CO changed its name to Foundation Health Systems Life & Health Insurance Co.
• RTD Drivers Support Network Association, Schaumburg, IL, redomesticated from Utah to District of Columbia.
• State Auto Insurance Co., Austin, TX, merged into Investors Life Insurance Co. of Indiana.
• Transnational Insurance Co., Edison, NJ, was approved as a surplus lines company.
• Universal Underwriters Insurance Co., Overland Park, KS, redomesticated from Missouri to Kansas.
• United Chiropractic Group, Inc., Winterset, IA, was registered as a purchasing group.
• Universal Underwriters Life Insurance Co., Overland Park, KS, redomesticated from Missouri to Kansas.

Market Conduct Exams

• American Chambers Life Insurance Co. has been ordered to, within 30 days: ensure that procedures are in place that allow the company to annually file an actaurial certification on or before March 15 verifying compliance with the Small Employer Health Insurance Availability Act; actively market at least (2) health benefit plans to the small employer market, including the basic and standard health plans; cease using and accepting any application that asks whether or not the applicant has been previously cancelled or nonrenewed by another; ensure the source of any statistic used in an advertisement is cited; file with the department any forms currently being used by or marketed through United Chambers Insured Plans, American Association of Employed Persons and Vantage; ensure that upon receiving notification of a claim the company acknowledges the receipt of the claim within 10 working days; pay or deny a claim within 15 working days after the investigation is completed; ensure that all complaints received are properly logged in the company's complaint register; ensure that unclaimed property reports are filed in a timely manner; ensure that it responds to the examiners' requests during a market conduct exam within the 10 day time frame established; and ensure that the officers, directors, employees and agents of the company facilitate the exam and aid in the exam.
• American General Life Insurance Co. has been ordered to, within 30 days: notify the director of an appointment or termination of an agent; cease using any policies, forms or applications not previously submitted to the department for review and approval and cease using and accepting any application that asks whether or not another insurer has refused to issue a policy, or has cancelled or refused to renew an existing policy.
• California Compensation Insurance Co. and Business Insurance Co. have been ordered to, within 30 days; notify the director of the appointment or termination of an agent.
• Empire Fire and Marine Insurance Co. has been ordered to, within 30 days: notify the director of the appointment or termination of an agent; prevent the payment of commissions to a broker or agency without first ensuring that a copy of their current license is on file; ensure that procedures are in place allowing the company to file its rating plans with the department, that the company correctly rates its policies based upon these rating plans filed with the department, and that documentation is maintained within the company's files to support any rating plan decision; cease using any rating plan or rating system which modifies the auto insurance premium charged for uninsured motorist coverage, comprehensive coverage or fire, theft and combined additional coverages or a combination based upon any insured's driving record of violations or accidents; promptly refund any premium incorrectly charged for any previously issued personal auto policies for the last three years; ensure that applications are signed by the agent and that an alternative method of identifying the agent is used; ensure that for each policy issued a copy of the application is maintained in the policy file; cease using and accepting any application that asks whether or not the applicant has been previously cancelled or nonrenewed by another carrier; ensure that all schedule debits, credits and all additional credits based on file evidence at the time the debit or credit is applied, terms should be sufficiently clear and specific, a copy of the written notice to the insured should be contained in the file for not less than three years; ensure that it produces records in response to the requests of the examiners during a market conduct exam; ensure that cancelling or nonrenewing a private passenger auto policy only occurs on the anniversary date of the policy; ensure that a copy of the nonrenewal notice for a commercial auto policy is maintained in the policy file, that the reason for nonrenewal is clear and specific, and that the notice shall be delivered to the insured at least 60 days prior to the effective date of the cancellation.
• General Accident Group, General Accident Insurance Co. of America, Camden Fire Insurance Association, Pennsylvania General, Potomac Insurance Co. of Illinois, Midwestern Insurance Co., Tri State Insurance Co., and Farmers and Merchants have been ordered to, within 30 days: have procedures in place to ensure that all applications are signed by the agent, and that all applications contain an alternative method of identifying the agent; cease using and accepting any application for any line of coverage that asks whether or not the applicant has been previously cancelled or nonrenewed by another carrier; ensure that the notice of termination for a homeowners policy states the insurer's actual reason for proposing the action and states the insured may be eligible for insurance through the Missouri basic property insurance inspection and placement program; ensure that the notice of nonrenewal for a homeowners policy states the insurer's actual reason for proposing the actionand states the insured may be eligible for insurance through the Missouri basic property insurance inspection and placement program; ensure that when renewing a private passenger auto policy that General Accident will send a written notice of renewal at least 15 days prior to the effective date of the new policy; correctly rate its private passenger auto policies based upon correct and accurate territory codes as should be contained in the company's rating plans filed with the department; ensure that all complaints received by General Accident are properly logged in the company's complaint register; ensure that General Accident exercises reasonable and necessary due diligence when attempting to ascertain the whereabouts of property owners prior to filing an unclaimed property report; and ensure that its underwriting guidelines for homeowners coverage do not make or permit any unfair discrimination between individuals or risks of the same class and of essentially the same hazards by refusing to issue, renew, cancel or limit the amount of insurance coverage on a residential property risk, or the personal property contained therein, because of the age of the residential property.
• J.C. Penney Life Insurance Co. has been ordered to, within 30 days: have procedures in place to ensure that all advertisements for policies of life insurance, whether group, individual or any other form, correctly represent the requirement that suicide is no defense to payment of life insurance benefits nor is suicide while insane a defense to payment of accidental death benefits; modify the language in all advertisements that incorrectly represent that attempted suicide is not a covered benefit; ensure that the following notice is clearly imprinted by stamp or otherwise over the face of any nonconforming suicide clause contained in the body of any policy, rider or certificate; cease using and accepting any application that asks if the applicant has been previously cancelled or nonrenewed by another carrier and ensure that it responds to the requests and criticisms of the examiners during a market conduct exam.
• The Franklin Life Insurance Co. has been ordered to, within 90 days: remove the question asking if an insurer has declined, rated or postponed a policy of insurance from all application documents and or the inspection data entry forms used in Missouri; file a copy of the inspection data entry forms used in the state of Missouri for approval and provide a premium refund.
• Universal Underwriters Insurance Co. has been ordered to, within 30 days: cease using and accepting any application that asks whether or not the applicant has been previously cancelled or nonrenewed by another carrier; ensure that all schedule debits and credits and all additional credits based on reduction of expenses are based on evidence contained in the file of the insurer at the time the debit or credit is applied and a notice should remain in the insureds file for not less than three years; ensure that procedures are established and/or maintained to allow the company to correctly rate its policies based upon the rating plans filed with the department, and based upon documentation maintained in its underwriting and rating files to support the loss costs/credits/rates applied to a policy; that a correct territory is used for rating the policy; and that a correct protection class code is used for rating the policy and establish and/or maintain procedures so as to correctly charge its policyholders the assessment amount associated with the Missouri Second Injury Fund.
• Zurich Insurance Co., American Guarantee and Liability Insurance Co., and American Zurich Insurance Co. have been ordered to, within 30 days: have procedures in place to prevent the acceptance of an application from an unlicensed individual; prevent the use or acceptance of applications not previously submitted to the department for review; ensure that its schedule rating plan for workers' compensation insurance complies with department guidelines; ensure that applications are signed by the agent, contain an alternative method of identifying the agent and that for each policy issued a copy of the application is maintained in the policy file; ensure that all schedule credits and credits based on reduction of expenses shall be based on the insurer's file evidence at the time the debit or credit is applied; the insurer shall inform the insured in writing of the basis for any schedule debit or credit when applied; a copy of the notice shall be contained in the policy file for not less than three years; cease using and accepting any application that asks whether or not the applicant has been previously cancelled or nonrenewed by another carrier; establish and maintain procedures that will allow the company to apply the proper rate when calculating the premium for its workers compensation policies and ensure its procedures allow the company to correctly charge its policyholders the assessed amount associated with the Missouri Second Injury Fund