Poolman fines insurer record $750,000 for violations

Bismarck, N.D. (AP) Insurance Commissioner Jim Poolman has fined the Farmers Insurance Group 750-thousand dollars.

The penalty is for allegedly shortchanging North Dakota auto insurance policyholders. Poolman says it's the largest insurance company penalty in state history.

The company denies the allegations. But a spokesman says Farmers Insurance agreed to the settlement to get the dispute out of the way.

Poolman says the investigation started in August of 2004 after a tip from a lawyer at a Fargo claims seminar.

Poolman says Farmers Insurance had quotas for denying claims and assuming some were fraudulent.

He says payments for some injuries were set according to predetermined ranges and weren't based on the merits of the claims.

Poolman says the pay of some Farmers Insurance employees was pegged to whether they kept their insurance payouts down. He says it was an incentive to treat policyholders unfairly.

Poolman says Farmers Insurance has thousands of auto insurance policyholders in North Dakota, but he doesn't have an exact number.

He says it collects about 11 (M) million dollars in auto insurance premiums every year in North Dakota. That ranks it number three among auto insurers in the state.

Mark Toohey is a spokesman for the company. He says customers' claims were paid properly, and he says Poolman doesn't have any evidence that specific customers were shortchanged.

(Copyright 2007 by The Associated Press. All Rights Reserved.) APNP 06-28-07 1056CDT | save this article / add to your favorites list