NY Fines 2 Insurers $4.2M For Alleged Reporting Failures

Superintendent of Financial Services Adrienne A. Harris today announced that Zurich American Insurance Company and Progressive Direct Insurance Company have entered into separate Consent Orders with the Department of Financial Services resolving DFS’s investigations into the companies’ failure to timely report certain insured vehicle information to the Department of Motor Vehicles.

Under those Consent Orders, Zurich has agreed to pay a fine of $2.2 million, and Progressive has agreed to pay a fine of $2 million, a total of $4.2 million to New York State.

This is the first such action that DFS has taken in an industry-wide investigation of untimely reporting to the DMV. New York’s Insurance Law requires insurers to report newly insured vehicles within seven days of their effective date and any terminations and suspensions of insurance within thirty days to DMV’s Insurance Information & Enforcement System (IIES) database.

DFS continues to actively investigate potential violations, working closely with the DMV to bring the entire New York insurance industry into compliance with New York State insurance law.

“This reporting requirement is critical to protect New Yorkers on the road, as the requirement helps ensure drivers can rely on the availability of insurance coverage to address potential injuries and car repairs in the unfortunate event of an accident,” said Superintendent Harris. “DFS expects insurers to comply with this important regulation to uphold the integrity and accuracy of auto insurance information to the state to protect consumers.”

“These consent orders are an important means of protecting consumers, and the DMV is grateful to the Department of Financial Services for taking action,” said DMV Commissioner Mark J.F. Schroeder. “Late or invalid insurance filings have a negative impact on New Yorkers, the DMV, and the insurance industry, so we work closely with insurance companies to make sure customers’ insurance information is filed with us in a timely manner. When insurance companies fail to comply, they put all New Yorkers at risk.”

These laws and regulations protect New Yorkers by ensuring that insurance information is available in the event of collisions and other auto-related inquiries. After DMV noticed industry-wide IIES reporting problems, DFS opened an investigation into untimely reporting of insurance information to DMV.

Under the Consent Orders, in addition to monetary penalties, Zurich and Progressive must each provide remediation plans detailing corrective actions that are subject to DMV’s approval. DFS acknowledges the cooperation of Zurich and Progressive, which were the first insurers to reach settlements with DFS in its ongoing, industry-wide investigation.

DFS continues to actively investigate other violations of IIES within the insurance industry and is in communication with DMV and other insurance companies in that market to bring the entire New York industry into compliance with New York law.