Preview
FILED: ALBANY COUNTY CLERK 05/05/2022 12:24 PM INDEX NO. 907614-16
NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 05/05/2022
EXHIBIT L
FILED: ALBANY COUNTY CLERK 05/05/2022 12:24 PM INDEX NO. 907614-16
NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 05/05/2022
NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES
X
In the Matter of
ALLSTATE INDEMNITY COMPANY, No 2020-0239-S
ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY,
ALLSTATE HRE AND CASUALTY INSURANCE COMPANY,and
ALLSTATE INSURANCE COMPANY
Respondents.
CONSENT ORDER
WHEREAS,the Department of Financial Services(the "Department")conducted a market
conduct investigation into the business practices of Ailstate Indemnity Company, Allstate Property
and Casualty Insurance Company, Allstate Fire and Casually Insurance Company and Allstate
Insurance Company (hereinafter ''Respondents") for the period from January 2011 through
September 2014.
WHEREAS,this Consent Order contains the Department's findings and the reliefagreed to
by the Department and Respondents.
NOW,THEREFORE,the Department and Respondents are willing to resolve the matters
cited herein in lieu of proceeding by notice and hearing.
FINDINGS
1. Respondents are foreign insurance companies, collectively authorized to transact accident
and health, fire, miscellaneous property, water damage, burglary and theft, glass, boiler and
machineiy, elevator, animal, collision, personal injury liability, properly damage liability.
FILED: ALBANY COUNTY CLERK 05/05/2022 12:24 PM INDEX NO. 907614-16
NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 05/05/2022
workers' compensation and employers' liability, fidelity and surely, credit, motor vehicle
and aircraft physical damage, marine and inland marine, marine protection and indemnity,
legal services, credit unemployment, and residual value insurance business in this State
pursuant to Section 1113(a)of the New York Insurance Law ("Insurance Law").
Respondents,for the time period January 2011 to September 2014;.
a. failed to report notice of termination ofcertain insured vehicles to the commissioner of
motor vehicles;
b. failed to retain proofof mailing of notices oftermination to insureds;
c. failed to send notices of cancellation to the mortgage holders/lienholders upon the
cancellation of the insureds' policies, as per the policy provisions;
d. improperly issued nonrenewal notices on homeowners policies during the three-year
required policy period;
e. failed to include required language on notices of termination to insureds in the motor
vehicle assigned risk plan;
f. failure to forward to applicants the prescribed application for motor vehicle no-fault
benefits within five business days after receipt of notice of claim at the proper claim
processing office;
t
g. failed to make timely requests for additional proofof claim verification;
h. failed to pay or deny claims within 30 calendar days after receipt of proof of claim
including all relevant verification requests;
i. failed to pay to applicants, or applicant's assignees, proper interest on overdue personal
injury protection benefits;
J. failed to properly calculate payments for loss ofearnings from work;
k. failed to include all complaint activity in consumer services department's ongoing
central log;
1. failed to make offers for the total loss within the prescribed time period following notice
of loss and the insured's provision of necessaiy claim information;
m. failed to advise effected insureds ofthe right to be reimbursed for transportation expenses
in the event of the theft of the entire vehicle; and
FILED: ALBANY COUNTY CLERK 05/05/2022 12:24 PM INDEX NO. 907614-16
NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 05/05/2022
n. failed to timely report total theft losses to the designated central organization.
3. Respondents' violations during the aforementioned time period contravened New York
Insurance Law and Regulations.
VIOLATIONS
4. By reason of the foregoing, Respondents violated:
a. Insurance Law Section 317 and New York Vehicle and Traffic Law ("VTL")
Section 313;
b. VTL Section 313;
c. Insurance Law Section 2307(b);
d. Insurance Law Section 3425(e);
e. Insurance Law Section 5301;
f. Section 65-3.4(b)ofInsurance Regulation 68[II NYCRR 65];
g. Section 65-3.5(b) ofInsurance Regulation 68;
h. Insurance Law Section 5106(a) and Section 65-3.8 ofInsurance Regulation 68;
i. Insurance Law Section 5106(a)and Section 65-3.9(a)of Insurance Regulation 68;
j. Section 65-3.16(b) of Insurance Regulation 68;
k. Section 216.4(e)ofInsurance Regulation 64[11 NYCRR 216];
1. Section 216.7(c)(7) ofInsurance Regulation 64;
m. Section 216.7(f) ofInsurance Regulation 64; and
n. Sections 216.8(d)(1)ofInsurance Regulation 64.
AGREEMENT
I
IT IS HEREBY UNDERSTOOD AND AGREED by Respondents, their successors, and
assigns(on behalf of their agents, representatives, employees, parent company, holding company,
and any corporation, subsidiary, or division through which Respondents operate) that:
5. Respondents represent, and have demonstrated to the Department, that they have
implemented the necessary actions to prevent recurrences of the violations described above
FILED: ALBANY COUNTY CLERK 05/05/2022 12:24 PM INDEX NO. 907614-16
NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 05/05/2022
including having made restitution in the total amount of$784,168 to claimants for overdue
interest on no-fault benefits;and also represent that Respondents are now compliant with the
aforementioned sections of the New York Insurance Law and Regulations. Respondents
will also take all necessary steps to comply with the New York Insurance Law and
Regulations with respect to their insurance products in the future. '
MONETARY PENALTY
6. Within seven (7)days ofthe execution ofthis Consent Order, Respondents shall pay a civil
penalty of Six Hundred Seventy-One Thousand Two Hundred Dollars ($671,200).
Respondents agree that it will not claim, assert, or apply for a tax deduction or tax credit
with regard to any U.S. federal, state, or local tax, directly or indirectly, for any portion of
the civil monetary penalty paid pursuant to this Consent Order.
7. The above referenced payment shall be payable to the New York State Department of
Financial Services account at JP Morgan Chase Bank, N.A. via electronic transfer in
accordance with the Department's instructions.
BREACH OF THE CONSENT ORDER
8. In the event that the Department believes Respondents to be materially in breach of this
Consent Order ("Breach"), the Department will provide written notice of such Breach to
Respondents, and Respondents must, within ten (10) business days from the date of receipt
ofsaid notice, or on a later date if so determined in the sole discretion of the Department,
appear before the Department and have an opportunity to rebut the evidence, if any, ofthe
Department that a Breach has occurred and, to the extent pertinent, to demonstrate that any
such Breach is not material or has been cured.
9. Respondents understand and agree that Respondents' failure to appear before the
Department to make the required demonstration within the specified period as set forth
herein is presumptive evidence of Respondents' Breach. Upon a finding of Breach, the
Department has all the remedies available to it under New York or other applicable laws and
may use any and ail evidence available to the Department for all ensuing examinations,
4
FILED: ALBANY COUNTY CLERK 05/05/2022 12:24 PM INDEX NO. 907614-16
NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 05/05/2022
hearings, notices, orders,and other remedies that may i3e available under New York or other
applicable laws.
OTHER PROVISIONS
10. IfRespondents default on any oftheir obligations under this Consent Order,the Department
may terminate this Consent Order at its sole discretion, upon ten (10)days' written notice to
Respondents. In the event of such termination, Respondents expressly agree and
acknowledge that this Consent Order shall in no way bar or otherwise preclude the
Department from commencing, conducting, or prosecuting any investigation, action, or
proceeding, however denominated, related to the Consent Order, against Respondents or
from using in any way the statements, documents, or other materials produced or provided
by Respondents prior to or after the date ofthis Consent Order,including,without limitation,
such statements, documents, or other materials, if any, provided for purposes ofsettlement
negotiations.
i I. The Department has agreed to the terms ofthis Consent Order based on,among other things,
representations made to the Department by Respondents and the Department's own factual
examination. To the extent that representations made by Respondents are later found to be
materially incomplete or inaccurate, this Consent Order or certain provisions thereof are
voidable by the Department in its sole discretion.
12. Upon the request of the Department. Respondents shall provide all documentation and
information reasonably necessary for the Department to verify compliance with this Consent
Order.
13. All notices, reports, requests, certifications, and other communications to the Department
regarding this Consent Order shall be in writing and shall be directed as follows:
Ifto the Department:
New York State Department of Financial Services
One State Street, 19'^' Floor
New York, InTY 10004-1511
Attention: My Chi To, Executive Deputy Superintendent for Insurance
FILED: ALBANY COUNTY CLERK 05/05/2022 12:24 PM INDEX NO. 907614-16
NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 05/05/2022
Ifto the Respondents:
Allstate Insurance Company (
878 Veterans Memorial Highway
Hauppauge,NY 11788
Attention: Mark L. Gardner, Regional Counsel
14. This Consent Order and any dispute thereunder shall be governed by the laws ofthe State of
New York without regard to any conflicts of laws principles.
15. Respondents waive their right to further notice and hearing in this matter as to any allegations
of past violations up to and including the Effective Date and agree that no provision ofthe
Consent Order is subject to review in any court or tribunal outside the Department.
16. This Consent Order may not be amended except by an instrument in writing signed on behalf
of all parties to this Consent Order.
17. This Consent Order constitutes the entire agreement between the Department and
Respondents relating to the violations identified herein and I supersedes any prior
communication, understanding, or agreement, whether written or oral, concerning the
subject matter ofthis Consent Order. No inducement, promise, understanding, condition,or
warranty not set forth in this Consent Order has been relied upon by any party to this Consent
Order.
18. In the event that one or more provisions contained in this Consent Order shall for any reason
be held invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision ofthis Consent Order.
19. Upon execution by the parties to this Consent Order, no further action will be taken by the
Department against Respondents for the conduct set forth in this Consent Order, subject to
the terms ofthis Order.
20. This Consent Order may be executed in one or more counterparts and shall become effective
when such counterparts have been signed by each of the parties hereto and So Ordered by
the Superintendent ofFinancial Services.
FILED: ALBANY COUNTY CLERK 05/05/2022 12:24 PM INDEX NO. 907614-16
NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 05/05/2022
ALLSTATE INDEMNITY COMPANY
A Dated: ZO. ZOZ.0
lark L. Gardner
Regional Counsel
ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY
Dated: ZQ,70Zd
Mark L. Gardner
/Regional Counsel
ALLSTATE FIRE AND CASUALTY INSURANCE COMPANY ;
Dated: /Lgt/yTr t-0 ZOZd
L. Gardner
igional Counsel
FILED: ALBANY COUNTY CLERK 05/05/2022 12:24 PM INDEX NO. 907614-16
NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 05/05/2022
ALLSTATE INSURANCE COMPANY
Dated:
ark L. Gardner
egional Coun
NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES
By: :? >7- u- Dated: 10/30/2020
My Chi To
Executive Deputy Superintendent for Insurance
THE FOREGOING CONSENT ORDER IS HEREBYAPPROVED.
JtA. 10/30/2020
By: Dated:
Linda A. Lacewell
Superintendent ofFinancial Services
Preview
FILED: ALBANY COUNTY CLERK 05/05/2022 12:24 PM INDEX NO. 907614-16 NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 05/05/2022 EXHIBIT L FILED: ALBANY COUNTY CLERK 05/05/2022 12:24 PM INDEX NO. 907614-16 NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 05/05/2022 NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES X In the Matter of ALLSTATE INDEMNITY COMPANY, No 2020-0239-S ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY, ALLSTATE HRE AND CASUALTY INSURANCE COMPANY,and ALLSTATE INSURANCE COMPANY Respondents. CONSENT ORDER WHEREAS,the Department of Financial Services(the "Department")conducted a market conduct investigation into the business practices of Ailstate Indemnity Company, Allstate Property and Casualty Insurance Company, Allstate Fire and Casually Insurance Company and Allstate Insurance Company (hereinafter ''Respondents") for the period from January 2011 through September 2014. WHEREAS,this Consent Order contains the Department's findings and the reliefagreed to by the Department and Respondents. NOW,THEREFORE,the Department and Respondents are willing to resolve the matters cited herein in lieu of proceeding by notice and hearing. FINDINGS 1. Respondents are foreign insurance companies, collectively authorized to transact accident and health, fire, miscellaneous property, water damage, burglary and theft, glass, boiler and machineiy, elevator, animal, collision, personal injury liability, properly damage liability. FILED: ALBANY COUNTY CLERK 05/05/2022 12:24 PM INDEX NO. 907614-16 NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 05/05/2022 workers' compensation and employers' liability, fidelity and surely, credit, motor vehicle and aircraft physical damage, marine and inland marine, marine protection and indemnity, legal services, credit unemployment, and residual value insurance business in this State pursuant to Section 1113(a)of the New York Insurance Law ("Insurance Law"). Respondents,for the time period January 2011 to September 2014;. a. failed to report notice of termination ofcertain insured vehicles to the commissioner of motor vehicles; b. failed to retain proofof mailing of notices oftermination to insureds; c. failed to send notices of cancellation to the mortgage holders/lienholders upon the cancellation of the insureds' policies, as per the policy provisions; d. improperly issued nonrenewal notices on homeowners policies during the three-year required policy period; e. failed to include required language on notices of termination to insureds in the motor vehicle assigned risk plan; f. failure to forward to applicants the prescribed application for motor vehicle no-fault benefits within five business days after receipt of notice of claim at the proper claim processing office; t g. failed to make timely requests for additional proofof claim verification; h. failed to pay or deny claims within 30 calendar days after receipt of proof of claim including all relevant verification requests; i. failed to pay to applicants, or applicant's assignees, proper interest on overdue personal injury protection benefits; J. failed to properly calculate payments for loss ofearnings from work; k. failed to include all complaint activity in consumer services department's ongoing central log; 1. failed to make offers for the total loss within the prescribed time period following notice of loss and the insured's provision of necessaiy claim information; m. failed to advise effected insureds ofthe right to be reimbursed for transportation expenses in the event of the theft of the entire vehicle; and FILED: ALBANY COUNTY CLERK 05/05/2022 12:24 PM INDEX NO. 907614-16 NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 05/05/2022 n. failed to timely report total theft losses to the designated central organization. 3. Respondents' violations during the aforementioned time period contravened New York Insurance Law and Regulations. VIOLATIONS 4. By reason of the foregoing, Respondents violated: a. Insurance Law Section 317 and New York Vehicle and Traffic Law ("VTL") Section 313; b. VTL Section 313; c. Insurance Law Section 2307(b); d. Insurance Law Section 3425(e); e. Insurance Law Section 5301; f. Section 65-3.4(b)ofInsurance Regulation 68[II NYCRR 65]; g. Section 65-3.5(b) ofInsurance Regulation 68; h. Insurance Law Section 5106(a) and Section 65-3.8 ofInsurance Regulation 68; i. Insurance Law Section 5106(a)and Section 65-3.9(a)of Insurance Regulation 68; j. Section 65-3.16(b) of Insurance Regulation 68; k. Section 216.4(e)ofInsurance Regulation 64[11 NYCRR 216]; 1. Section 216.7(c)(7) ofInsurance Regulation 64; m. Section 216.7(f) ofInsurance Regulation 64; and n. Sections 216.8(d)(1)ofInsurance Regulation 64. AGREEMENT I IT IS HEREBY UNDERSTOOD AND AGREED by Respondents, their successors, and assigns(on behalf of their agents, representatives, employees, parent company, holding company, and any corporation, subsidiary, or division through which Respondents operate) that: 5. Respondents represent, and have demonstrated to the Department, that they have implemented the necessary actions to prevent recurrences of the violations described above FILED: ALBANY COUNTY CLERK 05/05/2022 12:24 PM INDEX NO. 907614-16 NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 05/05/2022 including having made restitution in the total amount of$784,168 to claimants for overdue interest on no-fault benefits;and also represent that Respondents are now compliant with the aforementioned sections of the New York Insurance Law and Regulations. Respondents will also take all necessary steps to comply with the New York Insurance Law and Regulations with respect to their insurance products in the future. ' MONETARY PENALTY 6. Within seven (7)days ofthe execution ofthis Consent Order, Respondents shall pay a civil penalty of Six Hundred Seventy-One Thousand Two Hundred Dollars ($671,200). Respondents agree that it will not claim, assert, or apply for a tax deduction or tax credit with regard to any U.S. federal, state, or local tax, directly or indirectly, for any portion of the civil monetary penalty paid pursuant to this Consent Order. 7. The above referenced payment shall be payable to the New York State Department of Financial Services account at JP Morgan Chase Bank, N.A. via electronic transfer in accordance with the Department's instructions. BREACH OF THE CONSENT ORDER 8. In the event that the Department believes Respondents to be materially in breach of this Consent Order ("Breach"), the Department will provide written notice of such Breach to Respondents, and Respondents must, within ten (10) business days from the date of receipt ofsaid notice, or on a later date if so determined in the sole discretion of the Department, appear before the Department and have an opportunity to rebut the evidence, if any, ofthe Department that a Breach has occurred and, to the extent pertinent, to demonstrate that any such Breach is not material or has been cured. 9. Respondents understand and agree that Respondents' failure to appear before the Department to make the required demonstration within the specified period as set forth herein is presumptive evidence of Respondents' Breach. Upon a finding of Breach, the Department has all the remedies available to it under New York or other applicable laws and may use any and ail evidence available to the Department for all ensuing examinations, 4 FILED: ALBANY COUNTY CLERK 05/05/2022 12:24 PM INDEX NO. 907614-16 NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 05/05/2022 hearings, notices, orders,and other remedies that may i3e available under New York or other applicable laws. OTHER PROVISIONS 10. IfRespondents default on any oftheir obligations under this Consent Order,the Department may terminate this Consent Order at its sole discretion, upon ten (10)days' written notice to Respondents. In the event of such termination, Respondents expressly agree and acknowledge that this Consent Order shall in no way bar or otherwise preclude the Department from commencing, conducting, or prosecuting any investigation, action, or proceeding, however denominated, related to the Consent Order, against Respondents or from using in any way the statements, documents, or other materials produced or provided by Respondents prior to or after the date ofthis Consent Order,including,without limitation, such statements, documents, or other materials, if any, provided for purposes ofsettlement negotiations. i I. The Department has agreed to the terms ofthis Consent Order based on,among other things, representations made to the Department by Respondents and the Department's own factual examination. To the extent that representations made by Respondents are later found to be materially incomplete or inaccurate, this Consent Order or certain provisions thereof are voidable by the Department in its sole discretion. 12. Upon the request of the Department. Respondents shall provide all documentation and information reasonably necessary for the Department to verify compliance with this Consent Order. 13. All notices, reports, requests, certifications, and other communications to the Department regarding this Consent Order shall be in writing and shall be directed as follows: Ifto the Department: New York State Department of Financial Services One State Street, 19'^' Floor New York, InTY 10004-1511 Attention: My Chi To, Executive Deputy Superintendent for Insurance FILED: ALBANY COUNTY CLERK 05/05/2022 12:24 PM INDEX NO. 907614-16 NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 05/05/2022 Ifto the Respondents: Allstate Insurance Company ( 878 Veterans Memorial Highway Hauppauge,NY 11788 Attention: Mark L. Gardner, Regional Counsel 14. This Consent Order and any dispute thereunder shall be governed by the laws ofthe State of New York without regard to any conflicts of laws principles. 15. Respondents waive their right to further notice and hearing in this matter as to any allegations of past violations up to and including the Effective Date and agree that no provision ofthe Consent Order is subject to review in any court or tribunal outside the Department. 16. This Consent Order may not be amended except by an instrument in writing signed on behalf of all parties to this Consent Order. 17. This Consent Order constitutes the entire agreement between the Department and Respondents relating to the violations identified herein and I supersedes any prior communication, understanding, or agreement, whether written or oral, concerning the subject matter ofthis Consent Order. No inducement, promise, understanding, condition,or warranty not set forth in this Consent Order has been relied upon by any party to this Consent Order. 18. In the event that one or more provisions contained in this Consent Order shall for any reason be held invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision ofthis Consent Order. 19. Upon execution by the parties to this Consent Order, no further action will be taken by the Department against Respondents for the conduct set forth in this Consent Order, subject to the terms ofthis Order. 20. This Consent Order may be executed in one or more counterparts and shall become effective when such counterparts have been signed by each of the parties hereto and So Ordered by the Superintendent ofFinancial Services. FILED: ALBANY COUNTY CLERK 05/05/2022 12:24 PM INDEX NO. 907614-16 NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 05/05/2022 ALLSTATE INDEMNITY COMPANY A Dated: ZO. ZOZ.0 lark L. Gardner Regional Counsel ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY Dated: ZQ,70Zd Mark L. Gardner /Regional Counsel ALLSTATE FIRE AND CASUALTY INSURANCE COMPANY ; Dated: /Lgt/yTr t-0 ZOZd L. Gardner igional Counsel FILED: ALBANY COUNTY CLERK 05/05/2022 12:24 PM INDEX NO. 907614-16 NYSCEF DOC. NO. 36 RECEIVED NYSCEF: 05/05/2022 ALLSTATE INSURANCE COMPANY Dated: ark L. Gardner egional Coun NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES By: :? >7- u- Dated: 10/30/2020 My Chi To Executive Deputy Superintendent for Insurance THE FOREGOING CONSENT ORDER IS HEREBYAPPROVED. JtA. 10/30/2020 By: Dated: Linda A. Lacewell Superintendent ofFinancial Services