PUBLIC REPORT OF THE MARKET CONDUCT EXAMINATION
OF THE CLAIMS PRACTICES OF THE
THE CANADA LIFE ASSURANCE COMPANY
NAIC # 80659 CDI # 0693-2
CANADA LIFE INSURANCE COMPANY OF AMERICA
NAIC # 81060 CDI # 3240-9 AS OF NOVEMBER 30, 2005
STATE OF CALIFORNIA
DEPARTMENT OF INSURANCE
MARKET CONDUCT DIVISION
FIELD CLAIMS BUREAU
TABLE OF CONTENTS
SALUTATION.......................................................................................1
SCOPE OF THE EXAMINATION...............................................................2
CLAIMS SAMPLE REVIEWED AND OVERVIEW OF FINDINGS......................3
TABLE OF TOTAL CITATIONS.................................................................4
TABLE OF CITATIONS BY LINE OF BUSINESS............................................5
SUMMARY OF RESULTS.........................................................................6
STATE OF CALIFORNIA |
John Garamendi, |
Insurance Commissioner |
DEPARTMENT OF INSURANCE |
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Consumer Services and Market Conduct Branch
Field Claims Bureau, 11th Floor
300 South Spring Street
Los Angeles, CA 90013 |
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Insurance Commissioner
State of California
45 Fremont Street
San Francisco, California 94105
Honorable Commissioner:
Pursuant to instructions, and under the authority granted under Part 2, Chapter 1, Article 4, Sections 730, 733, 736, and Article 6.5, Section 790.04 of the California Insurance Code; and Title 10, Chapter 5, Subchapter 7.5, Section 2695.3(a) of the California Code of Regulations, an examination was made of the claims practices and procedures in California of:
The Canada Life Assurance Company
NAIC # 80659
Canada Life Insurance Company of America
NAIC # 81060
Group NAIC # 0769 Hereinafter referred to as CLAC, CLICA and the Company.
This report is made available for public inspection and is published on the California Department of Insurance web site (
www.insurance.ca.gov) pursuant to California Insurance Code section 12938.
SCOPE OF THE EXAMINATION
The examination covered the claims handling practices of the aforementioned Companies during the period December 1, 2004, through November 30, 2005. The examination was made to discover, in general, if these and other operating procedures of the Companies conform with the contractual obligations in the policy forms, to provisions of the California Insurance Code (CIC), the California Code of Regulations (CCR), the California Vehicle Code (CVC) and case law. This report contains only alleged violations of Section 790.03 and Title 10, California Code of Regulations, Section 2695 et al. Violations of other relevant laws were not found in this examination.
To accomplish the foregoing, the examination included:
1. A review of the guidelines, procedures, training plans and forms adopted by the Companies for use in California including any documentation maintained by the Companies in support of positions or interpretations of fair claims settlement practices.
2. A review of the application of such guidelines, procedures, and forms, by means of an examination of claims files and related records.
3. A review of consumer complaints received by the California Department of Insurance (CDI) in the most recent year prior to the start of the examination.
The examination was conducted primarily at the offices of Department of Insurance, Los Angeles, California.
The report is written in a "report by exception" format. The report does not present a comprehensive overview of the subject insurer's practices. The report contains only a summary of pertinent information about the lines of business examined and details of the non-compliant or problematic activities or results that were discovered during the course of the examination along with the insurer's proposals for correcting the deficiencies. When a violation is discovered that results in an underpayment to the claimant, the insurer corrects the underpayment and the additional amount paid is identified as a recovery in this report. All unacceptable or non-compliant activities may not have been discovered. Failure to identify, comment on or criticize activities does not constitute acceptance of such activities.
Any alleged violations identified in this report and any criticisms of practices have not undergone a formal administrative or judicial process. CLAIM SAMPLE REVIEWED AND OVERVIEW OF FINDINGS
The examiners reviewed files drawn from the category of Closed Claims for the period December 1, 2004, through November 30, 2005, commonly referred to as the "review period". The examiners reviewed 26 claim files. The examiners cited two 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.
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The Canada Life Assurance Company |
LINE OF BUSINESS / CATEGORY |
CLAIMS FOR REVIEW PERIOD |
REVIEWED |
CITATIONS |
Individual Life |
53 |
23 |
1 |
TOTALS |
53 |
23 |
1 |
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Canada Life Insurance Company of America |
LINE OF BUSINESS / CATEGORY |
CLAIMS FOR REVIEW PERIOD |
REVIEWED |
CITATIONS |
Variable Annuities |
3 |
3 |
1 |
TOTALS |
3 |
3 |
1 |
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TABLE OF TOTAL CITATIONS |
Citation |
Description |
CLAC |
CLICA |
CCR §2695.6(b)(4) |
The Company failed to maintain a copy of the certification required by CCR §2695.6(b)(1), (2) or (3) at the principal place of business. |
1 |
1 |
Total Citations |
1 |
1 |
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TABLE OF CITATIONS BY LINE OF BUSINESS |
INDIVIDUAL LIFE |
NUMBER OF CITATIONS |
SUBTOTAL |
1 |
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TABLE OF CITATIONS BY LINE OF BUSINESS |
VARIABLE ANNUITIES |
NUMBER OF CITATIONS |
SUBTOTAL |
1 |
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. There were no recoveries discovered within the scope of this report.
INDIVIDUAL LIFE 1. In one instance, the Company failed to maintain a copy of the certification required by CCR § 2695.6(b)(1),(2) or (3) at the principal place of business. The Company did not certify in writing that their adjusting staff had been trained in accordance with the California Code of Regulations. The Department alleges these acts are in violation of CCR §2695.6(b)(4)
Summary of Company Response: As a result of this exam all the claims handlers will be trained and certified by March 30, 2006. A copy of the certification will be sent to the Department. The certification will take place annually prior to September 1 as required by the Regulations.
VARIABLE ANNUITIES 1. In one instance, the Company failed to maintain a copy of the certification required by CCR § 2695.6(b)(1),(2) or (3) at the principal place of business. The Company did not certify in writing that their adjusting staff had been trained in accordance with the California Code of Regulations. The Department alleges these acts are in violation of CCR §2695.6(b)(4)
Summary of Company Response: As a result of this exam all the claims handlers will be trained and certified by March 30, 2006. A copy of the certification will be sent to the Department. The certification will take place annually prior to September 1 as required by the Regulations.
Last Revised - June 08, 2006
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