Pa. Insurance Department fines company for misleading consumers

HARRISBURG – Acting Pennsylvania Insurance Commissioner Michael Humphreys last week released a market conduct examination report of First Acceptance Insurance Company that resulted in a $105,000 penalty.

The examination found that agents for the company were misleading consumers and adding on optional third-party coverages without the consumer's knowledge or full understanding.

"First Acceptance's business practices were unacceptable, and the Shapiro administration will not stand for it," Humphreys said. "The Insurance Department will do everything we can to protect consumers and ensure that insurance companies comply with state and federal laws. Pennsylvanians concerned about company practices should always feel free to contact the department for assistance, including about sales practices that seem misleading, or complaints about the way an insurance company addressed a claim or complaint."

First Acceptance Insurance Company was cooperative during the examination, which covered the 2021 calendar year. During the course of the market conduct examination, examiners determined that while agents for First Acceptance Insurance Company were selling policies to consumers on the phone, they were adding optional third-party coverages without the consumer's knowledge or understanding. The agents were misleading the consumers to believe that the third-party coverages were included in the underlying policy, and never advised that the coverages were optional or the cost of the added coverages.

First Acceptance Insurance Company has been ordered to address the violations and pay a $105,000 penalty. The department reserves the right to follow up with the company within 12 months to make sure all the recommendations of the exam report were addressed to the department's satisfaction.

"The department remains committed to pursuing entities that are misleading consumers. Examinations like these are a key tool to help the department in its ongoing oversight of the industry," Humphreys said.

The department encourages consumers to shop around and consult with different insurance agents or companies to ensure that the policy benefits and price provide an acceptable level of protection and comfort. Shopping around can help to weed out any deceptive practices that may be "too good to be true." Consumers should also confirm the individual selling insurance is licensed to do so in Pennsylvania and should plan to carefully review a new policy to make sure it matches the anticipated purchase.

Consumers who believe their insurance plans are not in compliance with commonwealth laws or regulations, or who have questions about the benefits to which they are entitled, are urged to contact the Insurance Department's Bureau of Consumer Services online or at 1-877-881-6388.