June 12, 2009

Missouri Department of Insurance bars auto insurer from writing new business in the state

Jefferson City, Mo. - The Missouri Department of Insurance has issued a cease-and-desist order against a Chicago-based auto insurance company, citing numerous consumer complaints and violations of state law. Department Director John M. Huff issued the order on June 11, forbidding Universal Casualty Company from writing any new business in Missouri until certain allegations are resolved.

According to the director's order, the company violated Missouri insurance laws by:

  • Failing to respond to or properly investigate claims filed by policyholders within a timely manner;
  • Failing to respond to inquiries from the Department of Insurance, which is investigating consumer complaints;
  • Improperly denying claims; and
  • Offering unreasonably low dollar amounts for claims.

Department of Insurance statistics show Universal Casualty has more than 13 times the typical number of consumer complaints for a company its size. The department's most recent complaint index for the company is 1354. A complaint index of 100 is considered average. The department has received 63 consumer complaints against the company in 2009, compared to 18 for the previous three years.

"The department has serious concerns about Universal Casualty's ability to comply with Missouri consumer protection laws and treat its customers fairly," said Huff, director of the Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP). "We need to be convinced that the company has sufficient staffing and resources for handling insurance claims. Until then, we cannot allow the company to sell new policies in Missouri."

The order forbids Universal Casualty from writing new business in Missouri - it can continue servicing its current policyholders in the state. According to Department of Insurance market share reports, the company wrote $5.9 million in premiums in 2008.

The investigation into Universal Casualty is ongoing, and consumers with complaints are encouraged to call the department's Consumer Insurance Hotline at 1-800-726-7390 or file a complaint at insurance.mo.gov.