Hartford Ins. Accused of Charging Illegal Fees

Hartford Insurance has been accused by the Department of Insurance of charging an illegal fee. The fee was charged by a general agent of Hartford's and Hartford denies any wrongdoing on its part. Hartford is also, according to the company, cooperating with the Department of Insurance investigation.

This does not surprise me. Well, the allegation does not surprise me, and if Hartford had no knowledge, that would not surprise me as well. Agents, especially managing agents, have a lot of leeway and very little oversight, in my experience. They sometimes do things like this without anyone ever catching on.

The point for consumers, and this includes small businesses, is that you MUST shop around. Do not settle for a quote from one broker, even if it includes 5 or 10 insurance companies. Get quotes from two or three brokers. Sure, there will be some overlap, but you will see if you are really getting the best rate.

Comments

[Jonathan]

George -

Thanks for that great explanation. It is nice to read insurance explained by CPCUs. We seem to have learned how to speak in English.

I use my designation only in limited circumstances. First, when I am an expert witness, obviously, I use it. But, not in correspondence. Second, I use it when communicating with difficult adjusters who want to explain to me how the process works. Third, I use it when I am writing to in-house coverage adjusters or supervisors. They usually are fellow CPCUs and respect my opinion since they know we have a shared experience. Otherwise, it does not go on any pleadings and I am not sure that it is an appropriate use of the designation to list it that way. Besides, I agree with you: if people do not know what it means, it is a waste of time.

Jonathan

[George Wallace]

The Department's Complaint is accessible on the Department's Website, here: http://www.insurance.ca.gov/0400-news/0100-press-releases/0070-2006/upload/Hartfordcomplaint.pdf

[TypePad truncates the URL that appears in this comment, but it generates a working link to the Complaint as a PDF file, so interested readers can click right through.]

The Complaint is only five pages long, and gives a pretty straightforward accounting of where Hartford is alleged to have gone wrong: basically, an insurance "agent" who represents the insurer is prohibited from collecting fees in addition to premium, whereas an insurance "broker" who represents the prospective insured can charge commission, fees, etc., with the insured's agreement and full disclosure, etc. Superior Access was an agent but it acted like a broker, and Hartford is charged with the responsibility.

One interesting thing I note here is that the Senior Staff Counsel handling the case, Jon Tomashoff, specifically lists his CPCU designation whenever his name appears in the pleading. As an attorney-CPCU myself, I don't do that -- it's not all that likely to make an impression on the judge or opposing counsel, since they probably don't know of the CPCU designation -- and can't recall seeing an attorney do it in a pleading before. How about you Jonathan? Do you use the designation other than in communications with insurance professionals who will know its significance?