In determining that an enforcement action should be pursued
and in selecting the appropriate amount of the penalty from the applicable
range of penalty amounts that could be assessed, the Department shall
consider:
(a) The nature of the
violation, including but not limited to adverse actions such as overcharge of
premium, unlawful denials or terminations of coverage, placement in a program
or tier with a higher rate level or less coverage than the most favorable for
which the insured would qualify, misrepresentations of terms, unlawful denial
or delay of claims, unreasonably low claims offers or settlements, improper
sharing of personal information, acts of unfair competition and acts of unfair
discrimination.
(b) The severity of
the violation.
(1) Severity of the violation
includes but is not limited to:
(A) the extent
of harm revealed through a consumer complaint or otherwise brought to the
attention of the Department;
(B)
the amount of premium overcharge or undercharge;
(C) the amount of underpayment of a
claim;
(D) a comparison of the
length of the delay to the time reasonably necessary or legally required to
conduct the process or transaction;
(E) the significance of the amount of premium
involved in relation to the total premium for the coverage; and
(F) the significance of the amount of
underpayment of the loss settlement offer or final settlement involved in
relation to the total loss settlement determined to be
reasonable.
(2)
Consideration may also be given to the necessary complexity of the
transaction.
(c) The
frequency of the occurrence of the violation. In determining the frequency,
consideration may be given to the number of violations specifically identified
and the number of persons reasonably determined to have been impacted over a
given period of time by such violations within the insurer's population of
applicants, insureds, claimants, potential applicants or among its competitors
and to the number of files in which the violation takes place compared to the
number of files with a similar transaction but no violation.
(d) The knowledge or willfulness of the
non-compliant act.
(1) Violations that may be
considered willful or knowingly committed include but are not limited to the
following:
(A) When the insurer is aware at
the time of the act that it is violating the law;
(B) When the insurer reasonably should have
known of the act's unlawfulness when the non-compliant act occurred;
(C) When the insurer has promulgated express
policies or procedures that are in noncompliance with the law;
(D) When the insurer has failed to adopt,
communicate and implement reasonable standards for consistent, compliant
activity; or
(E) When the insurer
has failed to take effective remedial measures when a violation was identified
or discovered.
(2) In the
case of an employee, agent or contract entity conducting business on the
insurer's behalf, knowledge or willfulness shall be attributed to the insurer
unless the employee, agent or contract entity has acted outside the scope of
the employment, agency or contract.
(e) The monetary effect of the violation on
the insurer. For purposes of this criterion, consideration will be given to the
amount of monetary gain or loss experienced by the insurer as a result of the
violation.
(f) The compliance
record of the insurer. The compliance record includes but is not limited to the
following:
(1) The number and type of
violations identified in the investigation of consumer complaints generated by
the insurer over a given period of time or the number and type of violations
reported in a previous examination or investigatory report;
(2) The insurer's cooperation and prompt,
good-faith actions taken to provide restitution and correct any non-compliant
activity including where the noncompliance is discovered and resolved prior to
the Department's involvement;
(3)
The insurer's failure to take action in response to previous notifications
identifying the non-compliant activity;
(4) The insurer's failure to implement its
express commitments to take corrective action; and
(5) Any previous action taken against the
insurer.
(g) The duration
of the non-compliant activity. For purposes of this criterion, consideration
will be given as to whether the violation was a single event or violations
continued repeatedly over a given period of time.
(h) The existence of extraordinary
circumstances. Extraordinary circumstances are circumstances outside of the
control of the insurer that severely and materially affect the insurer's
ability to comply with the law. Extraordinary circumstances do not include
circumstances which the insurer could reasonably anticipate and prepare for or
prevent.
(i) Previous actions taken
by the Department against other insurers for similar noncompliance. For
purposes of this criterion, consideration shall be given to previous actions
for similar violations by insurers of similar size and circumstance. However,
such consideration shall not preclude the Department from taking an enforcement
action where no previous action had been taken or from seeking an increased or
decreased penalty amount relative to a previous penalty amount.