Indiana Joins Missouri in Banning New Business from Universal Casualty

Indiana has ordered Elk Grove Village, Ill.-based auto insurance company Universal Casualty Company (UCC) to stop writing new policies in the state until the company can demonstrate “improved business practices,” according to the Indiana Department of Insurance (IDOI), which has fined the company $200,000.

Although UCC writes less than 1 percent of the auto insurance business in the state, it ranked number one on IDOI’s complaint index for 2008. The department said it received more than 200 complaints from policyholders regarding the UCC’s unwillingness to pay claims properly and on time.

The Missouri Department of Insurance recently barred UCC from writing new business in that state for the same reasons.

The IDOI said it first investigated UCC in 2004 and fined the company $35,500 at that time for similar problems. The state allowed UCC time to improve its business practices, the department said, but continued consumer complaints prompted an additional investigation.

Under a commissioner’s order filed June 11, the company is required to submit and implement a “stringent Compliance Plan” before resuming new business in the state. Failure to submit such a plan in a timely manner will result in an additional $100,000 fine, the IDOI said. The order also directs UCC to reopen all consumer complaints since 2005; final determination of all such complaints will be subject to the regulators’ approval.

The company will undergo an additional examination to ensure full compliance as well, the department said. The IDOI said a typical customer complaint would “involve the consumer calling the insurance company numerous times never receiving a human response, the company not paying enough to properly fix the car, or refusing to pay for a rental.” Source: Indiana Department of Insurance, www.in.gov/idoi/index.htm