CALIFORNIA REGULATOR “REJECTED ADVICE TO FINE INSURERS”

California insurance commissioner Chuck Quackenbush rejected staff recommendations to impose heavy fines against p/c insurers State Farm, Allstate and 20th Century for the companies’ mishandling of claims stemming from the 1994 Northridge earthquake, the Los Angeles Times has reported. Staff lawyers reportedly found evidence that the companies had routinely under-valued claims, imposed improper deductions and forced policyholders to sue to get full payment for quake claims. With the abuses, the insurance department’s legal team recommended fines of $2.38bn against State Farm, $172m against Allstate and $819m against 20th Century, which has since been renamed 21st Century. The attorneys also suggested that the companies make a combined $232.6m contribution to a fund for reimbursing claimants. Mr Quackenbush ultimately levied a fine of $100,000 against 20th Century and ordered the three companies to place a combined $10m into the repayment fund. Mr Quackenbush has been ordered to testify at a hearing on April 26 after Jack Scott, chairman of the state assembly insurance committee, called for an inquiry into his enforcement practices.