The insurance company has agreed to reimburse its customers for more than $7 million.
As part of a settlement decree with the Minnesota Department of Commerce, Liberty Mutual has agreed to pay approximately $7.7 million to more than 86,000 customers for auto and homeowner’s insurance policies.
The insurer was the subject of an investigation into possible violations of state regulation legislation, which led to the issuance of the order.
The Minnesota Department of Commerce claimed that Liberty Mutual violated auto insurance regulations by not providing the required antitheft protection device discount, by using applicants’ residential tenant status to establish multi-policy discounts, and by applying an automated rate increase.
Over 53,604 current and former policyholders have received refunds or credits from Liberty Mutual totaling over $2.27 million, or an average of $42.41 per policyholder, as reported by the agency.
The process of refunding or crediting about 7,700 current and past policyholders with an estimated total of $2.7 million, or $350.65 per policyholder, has also been commenced by the corporation.
It is also planning to offer credits totaling $2.1 million and refunds totaling $670,000 to around 11,800 active customers (averaging $177.96) and 8,700 previous policyholders (averaging $77.01).
Liberty Mutual Insurance Company and other Liberty Mutual companies authorised to do business in Minnesota are parties to the consent order. The $150,000 civil penalty is suspended as long as the insurer abides by all of the agreement’s provisions.
“When consumers pay premiums for insurance policies, they are protected by state law to ensure that they get what they pay for,” stated Minnesota Commerce Commissioner Grace Arnold. As the department’s spokesperson put it, “This case demonstrates [the department’s] work to protect consumers and also ensure a fair and equitable marketplace.”
Liberty Mutual stated last week that it will be laying off about 850 employees as part of a “company transformation initiative.”
“We have made the difficult decision to eliminate approximately 850 positions, nearly all in the US across several functions this month, many of which are effective by the end of the year,” a spokeswoman said in a statement to Insurance Business.