From the Desk of Jeff Eberhard: Oregon issued civil penalties against two insurance companies for violating emergency orders related to COVID-19. What did these insurance companies do to deserve these fines?
Claims Pointer: Allstate and Root Insurance Companies were fined for canceling or not renewing policies during a time they were prohibited from doing so by a COVID-19 Emergency Order.
Earlier this year, Oregon Department of Consumer and Business Services (DCBS) issued COVID-19 Emergency Orders directed at insurance companies. The orders aimed to reduce some of the stress and financial strain Oregonians were experiencing because of the pandemic. Under the orders, insurance carriers were required to postpone cancellation or non-renewal of policies. Insurers also needed to provide extended grace periods for premium payments. The emergency orders were in effect from March 25th to September 20th of this year.
While these orders were in place, Allstate and Root Insurance Companies failed to comply. Specifically, both companies violated these orders by issuing cancelations or non-renewal notices during the time they were not allowed to.
Allstate Insurance was fined a total of $50,000 for cancelling or issuing non-renewals for failure to pay premiums on 84 insurance policies. While Root Insurance, a growing InsurTech company that automates many of its processes, was fined $10,000 when its system automatically generated notices of non-renewal to 100 customers. During the state’s lockdown, these 100 Root Insurance customers were driving less frequently which caused Root’s computer system to automatically send the notices. Both companies have made efforts to reinstate the policies. Even still, as the director of DCBS, Andrew Stolfi, warns, in Oregon “[v]iolations of our emergency orders are taken seriously.”