The state’s largest private property insurance company has been violating state law, mistreating customers and shifting profits to affiliates for years, according to an order released Thursday by the Office of Insurance Regulation.
Universal Property and Casualty Insurance Company has been fined $1.3 million for a laundry list of violations ranging from mismanaging its money to wrongfully denying insurance claims to failing to maintain appropriate records. Many of the violations are repeat offenses for the company, since regulators flagged the much of the misconduct in 2005.
The fine, if it holds, would be one of the largest ever levied against a property insurer.
Fort Lauderdale-based Universal has more than 542,000 policyholders, and is 15 times as large as it was in 2004. During that rapid growth span, regulators say, it built up a habit of breaking insurance rules and using questionable financial practices. Universal officials did not respond to requests for comment Thursday.
The company was blasted last year by the Insurance Consumer Advocate, Robin Westcott, for it’s practice of “post claim underwriting.” After homeowners filed insurance claims, the company scrutinizes the initial policyholder application, to see if any mistakes had been made. If the homeowner failed to report a credit issue on the initial application, Universal denies the claim and cancels the policy.
“This practice is reprehensible and should cease immediately,” said Westcott last month, urging the Office of Insurance Regulation to investigate.
OIR found that Universal was indeed cancelling policies after policyholders made claims, leaving homeowners who thought they had insurance with huge repair bills and no coverage.
"For far too long, this company unjustly denied claims and forced consumers into financially devastating situations," said Chief Financial Officer Jeff Atwater, in a statement.
The company also made several other violations, cited in the 19-page OIR order (which is subject to challenge by Universal before it becomes final). They include:
-- Canceling policies without justification (a “repeat violation” from a 2005 order)
-- Requiring homeowners to produce multiple “notarized proof of loss” documents after making a claim.
-- Not keeping a copy of consumer complaints, as required by regulators and Florida statutes
-- Several money-management issues, some of which are detailed below.