Illinois Department of Financial and Professional Regulation

320 W. Washington Street

Springfield, Illinois 62767

(217) 782-4515

http://insurance.illinois.gov

Illinois Department of Insurance

JB Pritzker

Governor

Dana Popish Severinghaus

Acting Director

A ELECTRONIC MAIL

eptember 3, 2021

Ms. Marita Zuraitis, President

c/o Kelly Rosetta Ott

Horace Mann Insurance Company

#1 Horace Mann Plaza

Springfield, IL, 62715

: Horace Mann Insurance Company, NAIC 22578

Teachers Insurance Company, NAIC 22683

Horace Mann Property & Casualty Insurance Company, NAIC 22756

Market Conduct Examination Report Closing Letter

Dear Ms. Zuraitis,

he Department has received your Company’s proof of compliance. Therefore, the Department is closing its file

on this exam.

intend to ask the Director to make the Examination Report and Stipulation and Consent Order available for public

inspection as authorized by 215 ILCS 5/132. At the Department’s discretion, specific content of the report may be

subject to redaction for private, personal, or trade secret information prior to making the report public. However,

any redacted information will be made available to other regulators upon request.

lease contact me if you have any questions.

incerely,

rica Weyhenmeyer

Chief Market Conduct Examiner

Illinois Department of Insurance

320 West Washington St., 5th Floor

Springfield, IL 62767

Phone: 217-782-1790

E-mail: Erica.Weyhenmeyer@Illinois.gov

ILLINOIS DEPARTMENT OF INSURANCE

MARKET CONDUCT EXAMINATION OF

Horace Mann Insurance Company

Teachers Insurance Company

Horace Mann Property & Casualty Insurance Company

MARKET CONDUCT EXAMINATION REPORT

DATE OF EXAMINATION: December 7, 2020 to June 25, 2021

EXAMINATION OF: Horace Mann Insurance Company (NAIC #22578), Teachers

Insurance Company (NAIC #22683), and Horace Mann Property &

Casualty Insurance Company (NAIC #22756).

ADDRESS: The Horace Mann Companies

#1 Horace Mann Plaza

Springfield, IL 62715

PERIOD COVERED BY October 1, 2019 through September 30, 2020

EXAMINATION: (Complaints were reviewed for the period April 1, 2019

through September 30, 2020)

EXAMINERS: Craig L. Leonard, CIE, CPCU, CCP, FLMI, ARC, AIAF, ARM,

MCM

Frank Fricks, CIE, CFE, FLMI, AIRC

Greg Hawkins

Nicholas Klug, MCM

Joan McClain, CIE, MCM, FLMI, AIRC

Miryam Ramirez, AIE, MCM

Michael Vogel, AIE, MCM, AIRC, ALMI

Mike Woolbright, CIE, MBA, ALHC, MCM

Table of Contents

I. SUMMARY ........................................................................................................................................ 1

II. BACKGROUND................................................................................................................................. 4

III. METHODOLOGY ............................................................................................................................. 6

IV. FINDINGS .......................................................................................................................................... 9

A. Complaint Handling .......................................................................................................................... 9

1. DOI Complaints ............................................................................................................................ 9

2. Consumer Complaints .................................................................................................................. 9

B. Marketing and Sales .......................................................................................................................... 9

1. Companies-generated Marketing .................................................................................................. 9

2. Producer Training Materials ......................................................................................................... 9

C. Risk Selection ................................................................................................................................... 9

1. Private Passenger Automobile Cancellations – Less than 60 days ............................................... 9

2. Private Passenger Automobile Cancellations – Greater than 60 days .......................................... 9

3. Private Passenger Automobile Nonrenewals ................................................................................ 9

4. Private Passenger Automobile Rescissions .................................................................................. 9

5. Homeowners Cancellations – Less than 60 days .......................................................................... 9

6. Homeowners Cancellations – Greater than 60 days ................................................................... 10

7. Homeowners Nonrenewals ......................................................................................................... 10

8. Homeowners Rescissions ........................................................................................................... 10

9. Dwelling Fire Cancellations – Less than 60 days ....................................................................... 10

10. Dwelling Fire Cancellations – Greater than 60 days .................................................................. 10

11. Dwelling Fire Nonrenewals ........................................................................................................ 10

12. Dwelling Fire Rescissions .......................................................................................................... 10

D. Underwriting and Rating ................................................................................................................. 10

1. Private Passenger Automobile New Business ............................................................................ 10

2. Private Passenger Automobile Renewals ................................................................................... 10

3. Homeowners New Business ....................................................................................................... 10

4. Homeowners Renewals .............................................................................................................. 11

5. Dwelling Fire New Business ...................................................................................................... 11

6. Dwelling Fire Renewals ............................................................................................................. 11

E. Claims ............................................................................................................................................. 11

1. Private Passenger Automobile First-Party Paid .......................................................................... 11

2. Private Passenger Automobile First-Party Closed Without Payment ......................................... 11

3. Private Passenger Automobile Total Loss .................................................................................. 11

4. Private Passenger Automobile Subrogation ............................................................................... 12

5. Private Passenger Automobile Third-Party Paid ........................................................................ 12

6. Private Passenger Automobile Third-Party Closed Without Payment ....................................... 12

7. Homeowners Paid ....................................................................................................................... 12

8. Homeowners Closed Without Payment ...................................................................................... 12

9. Dwelling Fire Paid ...................................................................................................................... 12

10. Dwelling Fire Closed Without Payment ..................................................................................... 12

I. SUMMARY

A targeted market conduct examination of Horace Mann Insurance Company (NAIC #22578), Teachers

Insurance Company (NAIC #22683), and Horace Mann Property & Casualty Insurance Company (NAIC

#22756) (collectively referred to as “Companies”) was performed to determine compliance with Illinois

Statutes and the Illinois Administrative Code.

The examination was targeted to Private Passenger Automobile (“PPA”), Homeowners (“HO”) and

Dwelling Fire (“DF”) coverages.

The following represents general findings; however specific details are found in each section of the report.

TABLE OF TOTAL VIOLATIONS

Crit

Statute/ Rule Description of Violations

Findings

Section

Files

Reviewed

# of

Violations

Error

50 Ill. Adm. Code

754.10

Underwriting and Rating: DF - New

Business: Companies failed to use the

correct protection class code.

D.5. 33 1 3.0%

2 215 ILCS 5/805.1

Underwriting and Rating: DF - New

Business: Companies failed to

produce a Mine Subsidence Waiver.

D.5. 33 1 3.0%

215 ILCS

5/143.14

Risk Selection: PPA – Canceled less

than 60 days: Companies failed to

retain a copy of the proof of mailing.

C.1. 7 7 100.0%

215 ILCS

5/143.15

Risk Selection: PPA – Canceled less

than 60 days: Companies failed to

provide evidence the lienholder

received proper notice.

C.1. 7 3 42.9%

215 ILCS

5/143.15

Risk Selection: PPA – Canceled

greater than 60 days: Companies

failed to provide the proper number of

days’ notice when cancelling for

nonpayment of premium.

C.2. 114 2 1.8%

50 Ill. Adm. Code

754.10

Underwriting and Rating: DF - New

Business: Companies failed to use the

correct rates and instead used rates

not yet in effect.

D.5. 33 1 3.0%

50 Ill. Adm. Code

754.10

Underwriting and Rating: DF -

Renewals: Companies failed to use

the correct rates and instead used rates

not yet in effect.

D.6. 84 2 2.4%

215 ILCS

5/143.14

Risk Selection: HO – Canceled less

than 60 days: Companies failed to

retain a copy of the proof of mailing.

C.5. 35 9 25.7%

215 ILCS

5/143.17

Risk Selection: HO – Nonrenewals:

Companies failed to retain a copy of

the proof of mailing.

C.7. 29 2 6.9%

215 ILCS

5/143.14

Risk Selection: HO – Canceled

greater than 60 days: Companies

failed to retain a copy of the proof of

mailing.

C.6. 113 78 69.0%

TABLE OF TOTAL VIOLATIONS

Crit

Statute/ Rule Description of Violations

Findings

Section

Files

Reviewed

# of

Violations

Error

215 ILCS

5/143.14

Risk Selection: DF – Canceled greater

than 60 days: Companies failed to

retain a copy of the proof of mailing.

C.10. 62 46 74.2%

215 ILCS

5/143.14

Risk Selection: DF – Canceled greater

than 60 days: Companies failed to

retain a copy of the proof of mailing.

C.10. 62 1 1.6%

215 ILCS

5/143.14

Risk Selection: HO – Canceled

greater than 60 days: Companies

failed to retain a copy of the proof of

mailing.

C.6. 113 24 21.2%

50 Ill. Adm. Code

754.10

Underwriting and Rating: HO - New

Business: Companies failed to use the

correct rates.

D.3. 113 7 6.2%

17 215 ILCS 5/805.1

Underwriting and Rating: HO - New

Business: Companies failed to

produce a signed Mine Subsidence

Waiver.

D.3. 113 2 1.8%

50 Ill. Adm. Code

754.10

Underwriting and Rating: HO - New

Business: Companies failed to use the

correct protection class code.

D.3. 113 3 2.7%

50 Ill. Adm. Code

752.40

Underwriting and Rating: HO - New

Business: Companies failed to

provide a requested application.

D.3. 113 1 0.9%

50 Ill. Adm. Code

754.10

Underwriting and Rating: HO -

Renewals: Companies failed to use

the correct protection class code.

D.4. 116 1 0.9%

50 Ill. Adm. Code

919.80 (d)(7)(B)

Claims: DF Paid Claims: Companies

failed to send a delay letter that

contains the "Notice of Availability of

the Department of Insurance".

E.9. 11 4 36.4%

215 ILCS

5/143(b)

Claims: PPA First-Party Paid Claims:

Companies failed to refund $379.20,

which was a pro rata share of the

deductible, after a subrogation

recovery.

E.1. 107 1 0.9%

50 Ill. Adm. Code

919.80(c)

Claims: PPA First-Party Paid Claims:

Companies failed to provide an

Exhibit A which contains the required

minimum information within seven

(7) days.

E.1. 107 1 0.9%

215 ILCS

5/143(b)

Claims: PPA Subrogation Claims:

Companies failed to refund the

deductible amount after a recovery

until the file was reviewed by the

examiners.

E.4. 76 13 17.1%

50 Ill. Adm. Code

919.80 (d)(7)(B)

Claims: HO Paid Claims: Companies

failed to send a delay letter that

contains the "Notice of Availability of

the Department of Insurance".

E.7. 82 15 18.3%

TABLE OF TOTAL VIOLATIONS

Crit

Statute/ Rule Description of Violations

Findings

Section

Files

Reviewed

# of

Violations

Error

50 Ill. Adm. Code

919.80(c)

Claims: PPA Total Loss Paid Claims:

Companies failed to provide an

Exhibit A which contains the required

minimum information within seven

(7) days.

E.3. 76 8 10.5%

215 ILCS

5/143(b)

Claims: PPA Total Loss Paid Claims:

Companies failed to provide the

policyholder with a refund of the

deductible.

E.3. 76 1 1.3%

50 Ill. Adm. Code

752.40

Underwriting and Rating: PPA - New

Business: Companies failed to retain

and provide a requested application.

D.1. 114 19 16.7%

50 Ill. Adm. Code

919.80(b)(3)

Claims: PPA Third-Party Closed

Without Payment Claims: Companies

failed to send a delay letter that

contained the "Notice of Availability

of the Department of Insurance".

E.6. 65 4 6.2%

50 Ill. Adm. Code

919.80(b)(3)

Claims: PPA Third-Party Paid Claims

Companies failed to provide a written

explanation for the delay to the third-

party claimant when claims remained

unresolved for more than 60 calendar

days from the date it was reported.

E.5. 82 13 15.9%

215 ILCS

5/154.6(b) and 50

IL Adm. Code

919.40

Claims: PPA Third-Party Paid Claims

Companies failed to acknowledge

pertinent communications within 15

working days.

E.5. 82 6 7.3%

II. BACKGROUND

The examination is of Horace Mann Insurance Company (NAIC #22578), Teachers Insurance Company

(NAIC #22683), and Horace Mann Property & Casualty Insurance Company (NAIC #22756) (collectively

referred to as “Companies”)

Horace Mann Insurance Company (NAIC # 22578) was incorporated as the Swiss National Insurance

Company, U.S.A. under the laws of Florida on September 23, 1963. It was licensed as a property and

casualty insurance company. The name was changed from Swiss National Insurance Company, U.S.A. to

Horace Mann Insurance Company effective November 6, 1967 and the Company was re-domesticated from

Florida to Illinois effective December 23, 1988.

Teachers Insurance Company (NAIC # 22683) was incorporated as INA Insurance Company of Delaware,

under the laws of Delaware on March 2, 1971. It was licensed as a property and casualty insurance

company. The name was changed from INA Insurance Company of Delaware to Teachers Insurance

Company effective May 17, 1976 and the Company was re-domesticated from Delaware to Illinois effective

August 23, 1989.

Horace Mann Property & Casualty Insurance Company (NAIC # 22756) was incorporated as Public

Employees Insurance Company in California on March 25, 1965. It was licensed as a property and casualty

insurance company. The name was changed from Public Employees Insurance Company to Allegiance

Insurance Company effective September 23, 1985. The name was changed from Allegiance Insurance

Company to Horace Mann Property & Casualty Insurance Company effective March 19, 2001 and the

Company was re-domesticated from California to Illinois effective September 16, 2010.

All three companies are direct subsidiaries of Horace Mann Educators Corporation (“HMEC”), a publicly

traded holding company.

As of December 31, 2019, the Companies’ written premiums in Illinois for the lines of business subject to

the scope of this examination were as follows:

Horace Mann Insurance Company (NAIC 22578)

Line of Business

Direct

Premiums

Written ($)

Direct

Premiums

Earned ($)

Direct

Unearned

Premium

($)

Direct

Losses Paid

($)

Direct

Losses

Incurred ($)

Direct

Losses

Unpaid ($)

Private Passenger

Automobile Liability

2,754,140 2,534,273 1,123,679 1,700,090 1,590,563 1,506,611

Private Passenger

Physical Damage

2,428,878 2,267,407 962,268 1,670,948 1,606,849 79,155

Motorcycle

Homeowners

606,532

613,451

333,236

152,052

126,052

(54,711)

Dwelling Fire

112,609

115,990

56,507

140,444

127,462

24,067

Mobile Homeowners

Totals

5,902,159

5,531,121

2,475,690

3,663,534

3,450,926

1,555,122

Teachers Insurance Company (NAIC 22683)

Line of Business

Direct

Premiums

Written ($)

Direct

Premiums

Earned ($)

Direct

Unearned

Premium

($)

Direct

Losses Paid

($)

Direct

Losses

Incurred ($)

Direct

Losses

Unpaid ($)

Private Passenger

Automobile Liability

1,050,379 1,086,075 283,538 655,535 431,890 1,049,998

Private Passenger

Physical Damage

991,468 1,024,187 270,350 489,418 448,312 (19,049)

Motorcycle

Homeowners

5,891,958

5,656,783

3,143,682

3,676,764

3,523,799

821,373

Dwelling Fire

Mobile Homeowners

Totals

7,933,805

7,767,045

3,697,570

4,821,717

4,404,001

1,852,322

Horace Mann Property & Casualty Insurance Company (NAIC 22756)

Line of Business

Direct

Premiums

Written

($)

Direct

Premiums

Earned ($)

Direct

Unearned

Premium

($)

Direct

Losses Paid

($)

Direct

Losses

Incurred

($)

Direct Losses

Unpaid ($)

Private Passenger

Automobile Liability

2,108,900 2,210,627 669,110 1,454,731 1,026,948 1,027,941

Private Passenger

Physical Damage

1,870,307 1,960,756 590,281 944,119 874,483 (34,134)

Motorcycle

Homeowners

561,744

592,219

300,046

377,550

353,782

134,960

Dwelling Fire

Mobile Homeowners

Totals

4,540,951

4,763,602

1,559,437

2,776,400

2,255,213

1,128,767

III. METHODOLOGY

The market conduct examination places emphasis on an insurer's systems and procedures used in dealing

with insureds and claimants. The period under review was generally October 1, 2019 through September

30, 2020. The following categories were the general areas examined:

A. Complaint Handling

B. Marketing and Sales

C. Risk Selection

D. Underwriting and Rating

E. Claims

The review of these categories was accomplished through examination of individual policy and claim files,

Companies’ procedures, written interrogatories, and interviews with the Companies’ personnel. Each of

these categories was examined for compliance with Department of Insurance rules and regulations, and

applicable state laws.

Criticisms were provided to the Companies addressing violations discovered in the review processes. All

valid criticisms were incorporated into this report.

The following methods were used to obtain the required samples and to assure a statistically accurate and

methodical selection. The samples were developed from data provided by the Companies. The sample size

was based on the most recent NAIC Market Regulation Handbook. Random samples were generated using

Audit Command Language (“ACL”) software and the selected samples were provided to the Companies

for retrieval.

Complaint Handling

Illinois Department of Insurance (“DOI”) Complaints and Consumer Complaints for the period April 1,

2019 through September 30, 2020, were reviewed for compliance with applicable state laws and the

Companies’ guidelines.

DOI Complaints – The population request for this category consisted of complaints received from the DOI

during the examination period. The Companies’ complaint registry was reconciled with the individual file

information and the DOI records to determine the completeness and accuracy of the data recorded. Each

complaint file, along with the underlying claim or underwriting file, was reviewed for compliance with

regulatory requirements.

Consumer Complaints – The population request for this category consisted of complaints received directly

from consumers during the examination period. The Companies’ complaint registry was reconciled with

the individual file information to determine the completeness and accuracy of the data recorded. Each

complaint file, along with the underlying claim or underwriting file, was reviewed for compliance with

regulatory requirements.

According to the Companies, they “did not actively monitor social media sites to discover references to its

company.”

Marketing and Sales

Marketing and sales materials were reviewed to evaluate the representations made by the Companies about

its’ products or services.

The examiners requested the Companies’ advertising and marketing manual; procedures for the approval

of any advertising developed by brokers or agents; a listing of all advertising and marketing materials used

by the Companies during the examination period; and producer training manuals.

The reviews included judgmental sampling of the information provided by the Companies.

Risk Selection

Cancellations and non-renewals were reviewed for compliance with statutory requirements and to ensure

reasons for termination were valid and not unfairly discriminatory. Samples were selected based on

transactions occurring during the period under examination.

Underwriting and Rating

The underwriting sample consisted of new and renewal business and was selected based on the inception

and renewal date occurring during the period under examination. Policies were reviewed for rating

accuracy, use of filed rates, use of filed forms, and compliance with the Companies’ underwriting

guidelines.

Claims

Claims were selected based on settlement occurring within the period under examination. Claims were

reviewed for compliance with policy contracts and endorsements, applicable sections of the Illinois

Insurance Code (215 ILCS 5/1, et seq.) and the Illinois Administrative Code (50 Ill. Adm. Code 101 et

seq.). Reviews were conducted of both claims paid and those closed without payment (“CWP”).

SELECTION OF SAMPLES

Population Sample Percentage

Size Size Reviewed

A. Complaint Handling

1. DOI Complaints 10 10 100.0%

2. Consumer Complaints 2 2 100.0%

B. Marketing and Sales

1. Companies-generated Marketing 223 50 22.4%

2. Producer Training Materials 227 50 22.0%

C. Risk Selection

1. PPA Cancellations - Less than 60 days 7 7 100.0%

2. PPA Cancellations - Greater than 60 days 1,986 114 5.7%

3. PPA Nonrenewals 16 16 100.0%

4. PPA Rescissions 0 0 N.A.

5. HO Cancellations - Less than 60 days 35 35 100.0%

6. HO Cancellations - Greater than 60 days 949 113 11.9%

7. HO Nonrenewals 29 29 100.0%

8. HO Rescissions 0 0 N.A.

9. DF Cancellations - Less than 60 days 3 3 100.0%

10. DF Cancellations - Greater than 60 days 62 62 100.0%

11. DF Nonrenewals 2 2 100.0%

12. DF Rescissions 0 0 N.A.

D. Underwriting and Rating

1. PPA New Business 1,623 114 7.0%

2. PPA Renewals 19,050 116 0.6%

3. HO New Business 703 113 16.1%

4. HO Renewals 5.421 116 2.1%

5. DF New Business 33 33 100.0%

6. DF Renewals 224 84 37.5%

E. Claims

1. PPA First-Party Paid 1,465 107 7.3%

2. PPA First-Party Closed Without Payment 317 82 25.9%

3. PPA Total Loss 194 76 39.2%

4. PPA Subrogation 125 76 60.8%

5. PPA Third-Party Paid 347 82 23.6%

6. PPA Third-Party Closed Without Payment 65 65 100.0%

7. HO Paid 309 82 26.5%

8. HO Closed Without Payment 72 72 100.0%

9. DF Paid 11 11 100.0%

10. DF Closed Without Payment 2 2 100.0%

IV. FINDINGS

A. Complaint Handling

1. DOI Complaints

No violations were noted.

2. Consumer Complaints

No violations were noted.

B. Marketing and Sales

1. Companies-generated Marketing

No violations were noted.

2. Producer Training Materials

No violations were noted.

C. Risk Selection

1. Private Passenger Automobile Cancellations – Less than 60 days

In seven (7) files (100% of the seven (7) examined), the Companies failed to retain a copy of the

proof of mailing as required by 215 ILCS 5/143.14. (Crit 3)

In three (3) files (42.9% of the seven (7) examined), the Companies failed to provide evidence the

lien holder received proper notice as required by 215 ILCS 5/143.15. (Crit 4)

2. Private Passenger Automobile Cancellations – Greater than 60 days

In two (2) files (1.8% of the 114 examined), the Companies failed to provide the proper number of

days’ notice when cancelling for nonpayment of premium as required by 215 ILCS 5/143.15. (Crit

3. Private Passenger Automobile Nonrenewals

No violations were noted.

4. Private Passenger Automobile Rescissions

According to the Companies, they had no rescissions during the examination period.

5. Homeowners Cancellations – Less than 60 days

In nine (9) files (25.7% of the 35 examined), the Companies failed to retain a copy of the proof of

mailing as required by 215 ILCS 5/143.14. (Crit 8)

6. Homeowners Cancellations – Greater than 60 days

In 102 files (90.3% of the 113 examined), the Companies failed to retain a copy of the proof of

mailing as required by 215 ILCS 5/143.14. (Crit 10 and Crit 15)

7. Homeowners Nonrenewals

In two (2) files (6.9% of the 29 examined), the Companies failed to retain a copy of the proof of

mailing as required by 215 ILCS 5/143.17. (Crit 9)

8. Homeowners Rescissions

According to the Companies, they had no rescissions during the examination period.

9. Dwelling Fire Cancellations – Less than 60 days

No violations were noted.

10. Dwelling Fire Cancellations – Greater than 60 days

In 47 files (75.8% of the 62 examined), the Companies failed to retain a copy of the proof of

mailing as required by 215 ILCS 5/143.14. (Crit 11 and Crit 14)

11. Dwelling Fire Nonrenewals

No violations were noted.

12. Dwelling Fire Rescissions

According to the Companies, they had no rescissions during the examination period.

D. Underwriting and Rating

1. Private Passenger Automobile New Business

In 19 files (16.7% of the 114 examined), the Companies failed to retain and provide a Private

Passenger Automobile application as required by 50 IL Admin. Code 752.40. (Crit 28)

2. Private Passenger Automobile Renewals

No violations were noted.

3. Homeowners New Business

In seven (7) files (6.2% of the 113 examined), the Companies failed to use correct rates which is a

violation of 50 IL Admin. Code 754.10. This resulted in undercharges totaling $1,149. (Crit 16)

In two (2) files (1.8% of the 113 examined), the Companies failed to obtain Mine Subsidence

waivers at the time the policies were written, which is a violation of 215 ILCS 5/805.1. (Crit 17)

In three (3) files (2.7% of the 113 examined), the Companies failed to assign the correct protection

class, which is a violation of 50 IL Admin. Code 754.10. This resulted in undercharges totaling

$340. (Crit 18)

In one (1) file (0.9% of the 113 examined), the Companies failed to obtain a signed application on

a re-written policy, a violation of 50 IL Admin. Code 752.40. (Crit 19)

4. Homeowners Renewals

In one (1) file (0.9% of the 116 examined), the Companies failed to use the correct protection class

as required by 50 IL Admin. Code 754.10. This did not result in a difference in premium. (Crit 20)

5. Dwelling Fire New Business

In one (1) file (3% of the 33 examined), the Companies failed to apply the correct protection class

code as required by 50 IL Admin. Code 754.10. This did not result in a different premium. (Crit 1)

In one (1) file (3% of the 33 examined), the Companies failed to produce a Mine Subsidence Waiver

as required by 215 ILCS 5/805.1. (Crit 2)

In one (1) file (3% of the 33 examined), the Companies failed to use the correct rates and instead

used rates not yet in effect as required by 50 IL Admin. Code 754.10. This resulted in a $44.00

overcharge. (Crit 6)

6. Dwelling Fire Renewals

In two (2) files (2.4% of the 84 examined), the Companies failed to use the correct rates and instead

used rates not yet in effect as required by 50 IL Admin. Code 754.10. This resulted in $112 in total

differences (an undercharge of $33 and an overcharge of $79.) (Crit 7)

E. Claims

1. Private Passenger Automobile First-Party Paid

In one (1) file (0.9% of the 107 examined), the Companies failed to refund $379.20, which was a

pro rata share of the deductible, after a subrogation recovery as required by 215 ILCS 5/143(b).

Once brought to their attention, the Companies sent a refund of deductible check in the amount of

$379.20 on 4/30/2021. (Crit 22)

In one (1) file (0.9% of the 107 examined), the Companies failed to provide an Exhibit A which

contains the required minimum information within seven days of determination the damage to the

insured vehicle resulted in a total loss as required by 50 IL Admin. Code 919.80(c). Once brought

to their attention, the Companies sent the appropriate letter dated 4/30/2021. (Crit 23)

2. Private Passenger Automobile First-Party Closed Without Payment

No violations were noted.

3. Private Passenger Automobile Total Loss

In eight (8) files (10.5% of the 76 examined), the Companies failed to provide an Exhibit A Letter

to the insured which contains the required minimum information within seven days of

determination the damage to the insured vehicle resulted in a total loss as required by 50 IL Admin.

Code 919.80(c). Once brought to their attention, the Companies sent the appropriate letters to the

insureds. (Crit 26)

In one (1) file (1.3% of the 76 examined), the Companies failed to refund the insured’s deductible

of $500 after a subrogation recovery as required by 215 ILCS 5/143(b). Once brought to their

attention, the Companies sent the deductible refund plus interest of $20 to the insured. (Crit 27)

4. Private Passenger Automobile Subrogation

In 13 files (17.1% of the 76 examined), the Companies failed to refund the insured’s share of the

deductible after subrogation recovery as required by 215 ILCS 5/143(b). Once brought to their

attention, the Companies sent refunds totaling $6,250. (Crit 24)

5. Private Passenger Automobile Third-Party Paid

In 13 files (15.9% of the 82 examined,) the Company failed to provide a reasonable written

explanation for the delay to the third-party claimant when an automobile property damage liability

claim remained unresolved for more than 60 calendar days from the date it was reported as required

by 50 IL Administrative Code 919.80(b)(3). (Crit 30)

In six (6) files (7.3% of the 82 examined,) the Company failed to acknowledge pertinent

communications from a claimant with respect to claims arising under a policy within 15 working

days from receipt of a communication as required by 215 ILCS 5/154.6(b) and 50 IL Administrative

Code 919.40. (Crit 31)

6. Private Passenger Automobile Third-Party Closed Without Payment

In four (4) files (6.2% of the 65 examined), the Company failed to send a delay letter that contains

the “Notice of Availability of the Department of Insurance” as required by 50 IL Admin. Code

919.80(b)(3). (Crit 29)

7. Homeowners Paid

In 15 files (18.3% of the 82 examined), the Companies failed to send delay letters that contained

the "Notice of Availability of the Department of Insurance", a violation of 50 IL Admin. Code

919.80(d)(7)(B). (Crit 25)

8. Homeowners Closed Without Payment

No violations were noted.

9. Dwelling Fire Paid

In four (4) files (36.4% of the 11 examined), the Companies failed to send a delay letter that

contained the "Notice of Availability of the Department of Insurance", a violation of 50 IL Admin.

Code 919.80(d)(7)(B). (Crit 21)

10. Dwelling Fire Closed Without Payment

No violations were noted.