ALBANY, N.Y. (Legal Newsline) - Outgoing New York Attorney General Andrew Cuomo on Friday announced that four insurance groups have agreed to pay nearly $120 million in excess funds to the state.
The Attorney General's Office settled with the four insurance groups -- ACE, Zurich, Pennsylvania Manufacturers and CNA -- over the excess collections of 36 of their member insurance companies.
The Workers' Compensation Board, Cuomo's office explained, charges annual fees to workers' compensation insurers. The insurers then cover these costs by charging their policyholders a surcharge on premiums.
Starting in 2000, the board used a different calculation than the one used to determine the surcharges to policyholders. As a result, he says some insurers collected too little in surcharges from their policyholders, while others -- including ACE, Zurich, Pennsylvania Manufacturers and CNA -- collected too much.
In the 2009 and 2010 New York State Budget bills, the Workers' Compensation Law was changed to prevent such overcharging and allowed the State to recover the excess funds that the insurers had collected.
Under last week's settlements, the ACE companies have agreed to pay $70 million, the Zurich companies $37.5 million, the Pennsylvania Manufacturer companies $5.9 million, and the CNA companies $5.75 million.
According to state law, the funds will be paid to the state of New York. The companies, Cuomo's office noted, all "fully cooperated" with the investigation.
"These four groups of insurance companies have done the responsible thing by agreeing to resolve their disputes with the State," Cuomo said in a statement.
"All other insurers who still retain excess funds should follow their lead or they will be brought to justice."
The 10 ACE insurers are: ACE American Insurance Company; ACE Fire Underwriters Insurance Company; ACE Indemnity Insurance Company; ACE Property and Casualty Insurance Company; Bankers Standard Insurance Company; Century Indemnity Company; Century Reinsurance Compan; Indemnity Insurance Company of North America; Insurance Company of North America; and Pacific Employers Insurance Company.
The nine Zurich insurers are: American Guarantee & Liability Insurance Co.; American Zurich Insurance Company; Assurance Company of America; Colonial American Casualty & Surety Co.; Fidelity & Deposit Co. of Maryland; Maryland Casualty Company; Northern Insurance Co. of New York; Universal Underwriters Insurance Co.; and Zurich American Insurance Company.
The three Pennsylvania Manufacturers insurers are: Manufacturers Alliance Insurance Company; Pennsylvania Manufacturers' Association Insurance Company; and Pennsylvania Manufacturers Indemnity Company.
The 14 CNA companies are: American Casualty Company of Reading, PA; Continental Casualty Company; Continental Insurance Company; National Fire Insurance Company of Hartford; Transcontinental Insurance Company; Transportation Insurance Company; Valley Forge Insurance Company; Buckeye Union Insurance Company; Fidelity & Casualty Company of NY; Firemen's Insurance Company of Newark, NJ; Glenn Falls Insurance Company; Kansas City Fire and Marine Insurance Company; National-Ben Franklin Insurance Company; and Niagara Fire Insurance Company.
From Legal Newsline: Reach Jessica Karmasek by e-mail at email@example.com.