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Monday, 10 October 2011 16:18

Allstate, Encompass Insurers Fined for Violating Delaware Insurance Law

Delaware Insurance Commissioner Karen Weldin Stewart has fined Allstate Insurance Co. and its subsidiary Encompass Insurance Co. a total of $50,000 for violations of Delaware insurance law.

The fines are contained in two separate consent orders, signed by Stewart this month.

The Allstate consent order asserts that the company violated insurance law by failing to provide defensive driving discounts to qualifying policyholders.

The Encompass consent order asserts the company violated the law by imposing an accident surcharge on policyholders involved in accidents even though they were not the party at fault. In all, 3,645 Delaware policyholders were impacted.

Allstate and Encompass cited computer errors and programming oversight as the cause of the violations and have said the problems have been fixed. Stewart wrote the orders in a way that would allow her to increase the fines up to $100,000 on each company if the problems re-emerge.

Stewart said she believes both companies did a good job of notifying and refunding all monies owed to policyholders, which totaled $848,355.

However, Stewart said she remains concerned about the effect these types of mistakes have on highway safety efforts, especially her department’s defensive driving program.

“One of my goals is to improve our state’s highway safety by getting more Delaware drivers into our defensive driving courses. What is more, I am committed to making sure that drivers who complete an approved defensive driving course get the discount to which they are lawfully entitled,” Stewart said.

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