Liberty Mutual has agreed to pay approximately $7.7 million to 86,506 policyholders for auto and homeowner insurance policies as a result of an investigation by the Department of Commerce, which alleged that Liberty Mutual violated several state insurance regulation laws.
The consent order involves Liberty Mutual Insurance Company and several other subsidiaries of Liberty Mutual that are licensed to do business in Minnesota.
According to a press release from the Department of Commerce, the allegations against Liberty Mutual and/or subsidiaries are as follows:
- Failed to offer the minimum antitheft protection device discount, related to auto insurance.
- Used an applicant’s status as a residential tenant in offering or establishing multi-policy discounts, which was related to bundling auto and homeowners’ insurance.
- Applied an automated rate increase in violation of state law, related to auto insurance.
Liberty Mutual is already taking steps to right these wrongs.
Liberty Mutual has refunded/credited over $2.27 million to 53,604 current and former policyholders, averaging $42.41 per policyholder.
They’ve also has started refunding/crediting 7,700 current and former policyholders an estimated $2.7 million, averaging $350.65 per policyholder, and will issue $2.1 million in credits and $670,000 in refunds to about 11,800 current policyholders (average $177.96 each) and 8,700 former policyholders (average $77.01 each).
The consent order includes a civil penalty of $150,000, which will be stayed (not paid) as long as Liberty Mutual fully complies with the terms of the consent order.
“When consumers pay premiums for insurance policies, they are protected by state law to ensure they get what they pay for,” said Commerce Commissioner Grace Arnold. “This case demonstrates Commerce’s work to protect consumers and also ensure a fair and equitable marketplace.”