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The examiners reviewed files drawn from the category of Closed Claims for the period June 1, 2004, through May 31, 2005, commonly referred to as the "review period". The examiners reviewed 400 UUIC claim files. The examiners cited 27 claim handling violations of the Fair Claims Settlement Practices Regulations and/or California Insurance Code Section 790.03 within the scope of this report. Further details with respect to the files reviewed and alleged violations are provided in the following tables and summaries.


The following is a brief summary of the criticisms that were developed during the course of this examination related to the violations alleged in this report. This report contains only alleged violations of Section 790.03 and Title 10, California Code of Regulations, Section 2695 et al. In response to each criticism, the Company is required to identify remedial or corrective action that has been or will be taken to correct the deficiency. Regardless of the remedial actions taken or proposed by the Company, it is the Company's obligation to ensure that compliance is achieved. Money recovered within the scope of this report was $297.08.
COMMERCIAL AUTOMOBILE
1. In nine instances, the Company failed to provide written notice of the need for additional time every 30 calendar days. The Department alleges these acts are in violation of CCR §2695.7(c)(1).

Summary of Company Response: It is the Company's procedure to provide written notice of the need for additional time every 30 calendar days. The Company acknowledges these instances which were the result of unintentional oversight. The individuals involved have been made aware of this compliance issue.

2. In three instances, the Company failed to warrant that non-original equipment manufacture replacement crash parts are of like kind quality, safety, fit and performance as original equipment manufacturer replacement crash parts. The Department alleges these acts are in violation of CCR §2695.8(g)(3).


3. In one instance, the Company failed to include a statement in its claim denial that, if the claimant believes the claim has been wrongfully denied or rejected, he or she may have the matter reviewed by the California Department of Insurance. The Department alleges this act is in violation of CCR §2695.7(b)(3).

Summary of Company Response: It is the Company's procedure to include a statement in a claim denial regarding a review by the California Department of Insurance. The Company acknowledges this instance which was the result of an unintentional oversight. The individual involved has been made aware of this compliance issue.

4. In one instance, the Company failed to accept or deny the claim within 40 calendar days. The Department alleges this act is in violation of CCR §2695.7(b).

5. In one instance, the Company failed to include, in the settlement, all applicable taxes, license fees and other fees incident to transfer of evidence of ownership of the comparable automobile. An error was made in the calculation of total loss fees in this instance. Sales tax was not included in the settlement. The Department alleges this act is in violation of CCR §2695.8(b)(1)(a).

Summary of Company Response: As a result of the findings of the examination, the Company issued a payment in the amount of $297.08 to the claimant. It is the Company's procedure to include all applicable taxes and fees when settling claims on total loss vehicles. The Company agrees that there was a miscalculation in the amount of fees paid on this total loss claim. This was an isolated error. The individual involved has been made aware of this compliance issue.


FIDELITY
There were no citations alleged or criticisms of insurer practices in this line of business within the scope of this report.
COMMERCIAL GENERAL LIABILITY
There were no citations alleged or criticisms of insurer practices in this line of business within the scope of this report.
COMMERCIAL BUILDING AND CONTENTS
6. In seven instances, the Company failed to provide written notice of the need for additional time every 30 calendar days. The Department alleges these acts are in violation of CCR §2695.7(c)(1).

Summary of Company Response: It is the Company's normal procedure to provide written notice of the need for additional time every 30 calendar days. These instances were inadvertent oversights. The individuals involved have been made aware of this compliance issue.


7. In three instances, the Company failed to properly document claim files. Of the cited instances, one was the result of missing documents. In the remaining two instances, the files lacked an adequate explanation of how depreciation that was applied to the claim settlement was arrived at. The Department alleges these acts are in violation of CCR §2695.3(a).
WORKERS COMPENSATION

8. In two instances, the Company failed to adopt and implement reasonable standards for the prompt investigation and processing of claims. In two instances, the Company failed to adopt and implement reasonable standards for the prompt investigation and processing of claims arising under its insurance policies. In the two instances cited the claim files did not contain a copy of the First Report of Injury Form (5020). The Department alleges these acts are in violation of CIC §790.03(h)(3).

Summary of Company Response: The Company agrees that the files did not contain a copy of the First Report of Injury Form (5020). These are isolated incidents. The individuals involved have been made aware of this compliance issue.

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Last Revised - March 17, 2006
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