Universal Fined $1.26 Million

The second largest property insurer in Florida, Universal Property & Casualty Insurance Company was ordered to pay an administrative fine of $1,26 million dollars last week by Kevin McCarthy, Commissioner of Florida's Office of Insurance Regulation. A market conduct examination was conducted and UPCIC's practices regarding claims handling, complaint handling, rate filings, financial transactions and underwriting were reviewed.

Four different violations were repeat violations from a 2005 market conduct examination. These repeat violations include failure to timely refund unearned premiums, failure to provide notices of cancellation or nonrenewal to insureds on a timely basis, failure to provide specific reasons to support cancellation or nonrenewal of policies, and use of an invalid reason for cancellation of policies.

One of the violations mentioned in the Order is one that I have seen in my practice, post-claim underwriting. Post-claim underwriting involves Universal performing further background checks on policyholders when he or she files a claim. In one of the cases that I have handled, a homeowner with a sinkhole had coverage denied after Universal performed its underwriting after he had filed his claim.

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