Liberty Mutual to repay $7.7M to Minnesotans for reported policy violations

One of the largest insurance companies in the country will repay more than $7 million to Minnesotans following an investigation into alleged policy and law violations.

It stems from a consent order after the Minnesota Department of Commerce’s Enforcement Division reported findings that Liberty Mutual violated several state insurance regulation laws. The full consent order can be found at the bottom of this article.

On Wednesday, the department announced Liberty Mutual agreed to pay $7.7 million to more than 86,500 Minnesotans through refunds, credits and premium discounts to settle the matter.

Among the allegations against Liberty Mutual and its subsidiaries is that they failed to offer minimum antitheft protection device discounts for auto insurance, applied an automated rate increase for auto insurance and used an applicant’s tenant status in offering multi-policy discounts.

The Department of Commerce says the company will repay $2.27 million to the more than 53,600 current and former policyholders affected by the antitheft discount violation, averaging just over $42 per policyholder; nearly $2.8 million in credits and refunds to 20,500 Minnesotans for the rate increase violation, averaging around $77 per former policyholder and $178 for current policyholders; and around $2.7 million to 7,700 Minnesotans for the multi-policy discount violation, averaging around $350 per policyholder.

A $150,000 civil penalty that would be paid to the state will only be ordered if Liberty Mutual fails to follow through with its agreement.

“When consumers pay premiums for insurance policies, they are protected by state law to ensure they get what they pay for,” Commerce Commissioner Grace Arnold said in a statement. “This case demonstrates Commerce’s work to protect consumers and also ensure a fair and equitable marketplace.”

Liberty Mutual sent the following statement to 5 EYEWITNESS NEWS:

“These were unintentional errors, including one that was self-reported. We have fully cooperated with the Minnesota Department of Commerce and have made all corrections in our rating programs. In addition, many of the refunds to our customers already have been completed or are underway.”