State Farm among insurers named and humiliated for ‘woefully insufficient’ premium relief
Read more: Advocacy groups slam insurers and regulators for behavior during COVID
To put the story in perspective, the Chicago Sun-Times contacted CFA and CEJ to examine the amount of money auto insurers made in Illinois, the amount of money they paid back, and the additional income they generated from reduced accidents in 2020 .
Consumer groups concluded the insurer’s windfall was what could have been another reimbursement of $ 99 (on average) per car in Illinois, on top of the help customers received in 2020.
“They were using premiums that had nothing to do with the world as it existed,” said Douglas Heller, CFA insurance expert. Chicago Sun-Times.
State Farm is considered a particularly egregious example. In California, where the law requires insurers to make reimbursements when claims are lower than expected, State Farm has paid customers $ 400 million in reimbursements; these refunds amounted to approximately $ 100 per policy.
By comparison, Illinois does not have similar laws. In two newsletters last year, the Illinois Department of Insurance did not suggest that insurers share their pandemic earnings with consumers. Most Illinois consumers saw no change in their auto insurance rates last year.
But also last year, State Farm gave President, President and CEO Michael Tipsord an $ 18 million bonus – on top of his $ 2.1 million salary – for good business in 2020. The company paid more than $ 44 million in bonuses to its senior executives in 2020, more than double the amount reported in 2019 Chicago Sun-Times.
Heller added: “I hope there is a lawmaker who calls the insurance commissioner and says, ‘How can we change this law? Because it is really unacceptable.
“As we pointed out letter after letter to insurance regulators throughout 2020, it was clear that premium relief from insurers was woefully inadequate,” said CFA director of insurance and former commissioner. to Texas State Insurance, J. Robert Hunter.
Besides, Chicago Sun-Times looked at another Illinois-based insurer, Allstate, and found that the company had increased the total compensation of its CEO, Thomas Wilson, by 7.7% in 2020. The insurer was also successful in suing its acquisition of National General for $ 4 billion and Safe Auto. for $ 300 million last year.