July 01, 2015

Missouri insurance regulator reaches settlement with American Modern Insurance Group

Insurer allegedly charged excessive rates

Jefferson City, Mo. - The Missouri Department of Insurance today announced that a regulatory agreement has been reached with American Modern Insurance Group, Inc. Missouri regulators participated in a multistate market conduct action of American Modern in collaboration with regulators in Ohio, Indiana and Washington. In the settlement, American Modern agrees to pay $6 million in penalties and establish a $20.3 million restitution pool.

"This insurer was facing allegations of charging excessive rates for lender placed policies to homeowners" said Department Director John M. Huff. "Our team was able to collaborate on a settlement with multiple states to benefit Missourians."

As part of the settlement agreement, American Modern will bring its rates into conformance with previously approved rates. It will also review polices in-force during Jan. 1, 2009 to March 31, 2013 and will send a notice and claim form to borrowers, who are eligible to receive restitution for premiums paid above the filed rates. American Modern did a self-evaluation, which revealed an issue with respect to premium charges in excess of filed and/or approved rates on lender placed insurance products. 

In addition to individual consumer's restitution, Missouri will receive $145,819, paid to the Missouri State School fund.

In market conduct actions, the Department of Insurance reviews insurance company practices regarding the treatment of policyholders. This includes the way premium rates are charged, the way insurers handle claims and other responsibilities under state law. These reviews can result in refunds for consumers, fines and corrections in business practices, as well as other remedies.

Consumers who have complaints or questions about life and other types of insurance, can call the department's Insurance Consumer Hotline at 800-726-7390 or by visiting insurance.mo.gov.