Lynch mulling options with insurance company
PROVIDENCE, R.I. - Beacon Mutual Insurance Co. looks like it is for some more tough times in Rhode Island.
The state's Department of Business Regulation released its final report on the company today, finding it gave preferences to certain employers and contributions to institutions connected to its board members.
It has already agreed to pay a $2.5 million fine and return another $7 million to policyholders. Attorney General Patrick Lynch said a criminal investigation that has already resulted in the indictment of one high-ranking member remains active.
On the civil side, he said the State fought for a decrease in the rates proposed by the company.
"(T)hrough the efforts of our Civil Division's Insurance Advocacy Unit, we fight for the rights of ratepayers in filings and hearings before the (DBR)," Lynch said. "In our recent filing, we called for a much steeper decrease in rates than those that Beacon had proposed."
Ultimately, the DBR agreed to reduce mutual rates by 5.9 percent. Beacon Mutual said it would save its 14,000 policyholders and estimated $7.5 million in premiums.
In 2006, Beacon's rates were reduced by 16 percent. At the tail end of the year, an independent study found numerous ethical violations at the company.
"As the situation stands now, the Attorney General's Office has two distinct responsibilities with respect to Beacon Mutual," Lynch said. "One responsibility is that of criminal prosecutor and the other is that of civil advocate for their customers, the ratepayers."