March 25, 2013
Department of Insurance reaches settlement with travel insurance company that will refund nearly $2 million to Missourians
Consumers had to opt-out of policies on popular travel website
Jefferson City, Mo. - The Missouri Department of Insurance today announced that Missouri consumers who purchased travel insurance policies may be entitled to a refund of nearly $2 million. The policies were sold by the National Union Fire Insurance Company of Pittsburgh, Pa., (NUFIC) and were offered on Travelocity.com and other websites powered by Travelocity.
The department alleged NUFIC violated state law by requiring consumers to affirmatively "opt-out" of buying travel insurance policies. The settlement says NUFIC will refund $2 million to Missourians who purchased travel insurance policies from the company through Travelocity and other websites powered by Travelocity from June 1, 2009 to January 24, 2012. NUFIC sold nearly 70,000 policies of its Travel Guard Protection Plan to Missourians during that time period.
"Missourians who may have been misled into purchasing unwanted travel insurance policies will be entitled to refunds," said John M. Huff, director of the Missouri Department of Insurance. "Protecting consumer rights is essential and holding companies accountable for questionable business practices will remain at the forefront of our department's mission."
During its investigation, the department found that consumers had to affirmatively "opt-out" of NUFIC's travel insurance policy while booking flights on Travelocity or websites powered by Travelocity. If a consumer did not decline coverage, the cost of the policy, which was $24.95 per person for domestic travel and $44.95 per person for international travel, was included in the total purchase price.
In addition to refunding consumers, NUFIC agreed to stop the sale of all its travel insurance policies in Missouri through an "opt-out" methodology on Travelocity or any other websites selling the company's policies. The company also will have 150 days to refund Missouri consumers. Any unclaimed refunds will be reported to the unclaimed property division of the Missouri State Treasurer.
Market conduct exams and investigations allow the Department of Insurance to review an insurance company's practices regarding the treatment of policyholders. This includes the way premium rates are charged, how claims are handled and other responsibilities under state law. Reviews can result in refunds for consumers, fines and corrections in business practices, as well as other remedies.
Since the beginning of 2009, Market Conduct enforcement actions have generated more than $17 million in payments from insurance companies. The money goes toward refunds for consumers, General Revenue and the Missouri State School Fund.
Consumers who are entitled to a refund will be contacted by email on how to claim a refund. NUFIC will also run ads in newspapers throughout the state directing consumers to a website where they can make a claim for a refund.
Consumers with complaints or questions about their insurance company can call the department's Insurance Consumer Hotline at 800-726-7390 or visit insurance.mo.gov.
About the Missouri Department of Insurance, Financial Institutions & Professional Registration
The Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP) is responsible for consumer protection through the regulation of financial industries and professionals. The department's seven divisions work to enforce state regulations both efficiently and effectively while encouraging a competitive environment for industries and professions to ensure consumers have access to quality products.