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NY fines Arch Insurance, AIG unit $2.2M for violating insurance law

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NY fines Arch Insurance, AIG unit $2.2M for violating insurance law

The New York State Department of Financial Services fined Arch Insurance Co. and National Union Fire Insurance Co. of Pittsburgh Pa. a combined total of $2.2 million over state insurance law violations.

The companies were also ordered to provide retroactive rebates totaling about $8 million to certain firefighter companies in the state.

The DFS said Arch Insurance issued 3,332 blanket accident and health insurance policies to 628 New York firefighter companies between 2011 and 2017. During that time, it failed to comply with a minimum loss ratio standard that requires premiums to be reasonable relative to claims paid under a policy, causing volunteer firefighter companies to be overcharged premiums of about $5.3 million.

It was fined $1 million and will provide retroactive rebates to affected companies for the $5.3 million that was overcharged.

National Union Fire Insurance failed to comply with the minimum loss ratio standard from 2015 to 2017, the regulator said, resulting in volunteer firefighter companies being overcharged premiums of approximately $1.6 million in total. Also, from 2015 to 2018, the company charged premium rates on blanket A&H policies for volunteer firefighter companies that were not filed with the regulator, which led to premiums of approximately $1.2 million being overcharged.

The American International Group Inc. unit will pay a $1.2 million fine and provide retroactive rebates to affected companies for both instances of overcharging.