Auto Club Inter-Insurance Exchange (“ACIIE”) utilized an application which contained the following statement, “I warrant that the statements hereon are true and correct and I understand these statements will be relied upon by the ACIIE in issuing the policy.” This constitutes a violation of K.A.R. 40-3-16(b).
Form #5901KS(4/2004), (the Homeowners Application), was approved by KID to be effective 4/14/2004. Auto Club was utilizing an individual’s credit history as an underwriting tool in determining the eligibility of an account for their Homeowners program. K.S.A. 40-5106 requires disclosure to the applicant that an internal appeal process exists. Adverse action resulting from Auto Club’s use of credit history either partially or solely as reason for cancellation or non-renewal constitutes a violation of K.S.A. 40-5106. The consumer was not advised of the internal appeals process per K.S.A. 40-5107(b).
Pursuant to K.S.A. 40-2,125(a)(1), Auto Club shall pay a monetary penalty of One Thousand Dollars and No Cents ($1,000.00), due and payable to the Kansas Insurance Commissioner on or before the 14th day from the date of this Order for the above-stated violations of K.A.R. 40-3-16(b) and K.S.A. 40-5106.
Six Auto Club policies sampled by the MCE team which were cancelled or non- renewed for underwriting reasons contained language which was vague and unclear and did not identify the specific reason for the adverse action. This constitutes a violation of K.S.A. 40-5107(2)(b) and (c) and K.S.A. 40-2,112.
One Auto Club policy was cancelled solely for credit reasons. Auto Club’s cancellation notice to the policyholder identified a 2002 bankruptcy as the reason for cancellation. This constitutes a violation of K.S.A. 40-5104(b).
In the Matter of Auto Club Group of Missouri, Automobile Club Inter-Insurance Exchange & Auto Club Family Insurance Company – Docket No. 3591-MC