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BEFORE THE COMMISSIONER OF INSURANCE OF THE STATE OF KANSAS - page 3 / 11

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The language is vague and unclear and does not identify the specific reason for

adverse action.

  • 11.

    One (1) of the Auto Club policies sampled used credit as the sole reason for cancellation. In the cancellation notice the Auto Club specifically stated a 2002 bankruptcy was the reason for cancellation.

  • 12.

    Kansas law requires a cancellation notice to contain either a written explanation specifically detailing the reasons for cancellation or the opportunity to request the reason(s) for cancellation from the company. Two (2) of the Auto Club policies were canceled and contained only the following statement:

a.

“We are unable to continue this automobile insurance policy without the pertinent underwriting data”

“Pertinent underwriting data” does not constitute a specific reason for cancellation.

Auto Club did instructed insureds to contact their agent rather than Auto Club and did

not provide notice of the ten (10) day response time required by the company in

violation of K.S.A. 40-2,122 and K.A.R. 40-3-31.

  • 13.

    One (1) of the Auto Club policies sampled was non-renewed without a substantial change in exposure to non-renew for claim exposure. The insured was involved in one (1) at-fault accident within three (3) years resulting in no change in exposure.

  • 14.

    One Auto Club policies sampled was non-renewed without a copy of the non-renewal notice in the file.

Applicable Law

K.S.A. 40-2404 states, in pertinent part:

The following are hereby defined as unfair methods of competition and unfair or deceptive acts or practices in the business of insurance:

In the Matter of Auto Club Group of Missouri, Automobile Club Inter-Insurance Exchange & Auto Club Family Insurance Company – Docket No. 3591-MC

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