Insurance Commissioner Dave Jones today announced that the enforcement action taken against W.R. Berkley Corporation entities and operating units has resulted in a $12 million settlement. Admiral Insurance Company, Admiral Risk Insurance Services, Inc. aka BXM Insurance Services, Inc., and other self-disclosed entities agreed to settlements for licensing violations and unlawfully transacting surplus line insurance in California.
"Businesses and individual consumers should have confidence that companies selling insurance in California are doing so in compliance with our consumer protection laws," said Insurance Commissioner Dave Jones. "Our enforcement action has resulted in Admiral and W.R. Berkley Corporation paying a substantial monetary settlement for their licensing violations and ensures that they are now complying with all of California's insurance laws and regulations. Failure to continue compliance will result in additional automatic penalties and sanctions."
The case came to the California Department of Insurance as a referral from the Surplus Line Association of California (SLA). The original parties involved Admiral Insurance Company, an operating unit of W.R. Berkley Corporation; Admiral Risk Insurance Services, Inc.; and, three of Admiral Risk's now-former employees. The department began its investigation in 2011 and found that Admiral Risk and its employees transacted surplus line insurance without holding requisite surplus line broker licenses from approximately November 2003 through June 2011. Further, Admiral Risk impermissibly acted as a managing general agent for affiliated company Admiral Insurance Company, an insurer not admitted to transact business in California.
After the department began its investigation, Admiral Risk and its employees obtained the necessary licensing. W.R. Berkley Corporation later hired outside counsel to conduct an independent review of its operations, and self-disclosed compliance issues to the Department.
"As California's largest consumer protection agency, we must ensure that consumer protections laws are followed," added Jones. "The department's duties also include helping companies come into compliance. W.R. Berkley Corporation has taken the right steps toward remediating its former practices."
The settlement agreement specifies that Admiral Risk Insurance Services, Inc. nka BXM Insurance Services, Inc., in lieu of license suspension, will pay a monetary settlement of $1.5 million and also pay a cost recovery fee of $42,500 to reimburse the Department for expenses incurred. Admiral Insurance Company will pay the same monetary settlement and cost recovery fees for its actions.
W.R. Berkley Corporation has also agreed to pay a $9 million settlement and $15,000 for cost recovery. In recognition of the self-reporting and remedial actions already implemented by W.R. Berkley Corporation, the settlement provides that $6 million of the settlement is suspended.