STATE OF CONNECTICUT

INSURANCE DEPARTMENT

Market Conduct Report

Of

Encompass Insurance Company of America

September 8,2017

The Market Conduct Division of the Connecticut Insurance Department examined thebooks and records of Encompass Insurance Company of America by survey using asample period of January 1, 2015 through December 31, 2015. The examination waslimited to Connecticut business. .

Encompass Insurance Company of America is domiciled in the State of Illinois. Byauthority granted rmder Section 3 8 a-15 of the Coimecticut General Statutes, thisexamination was conducted by Market Conduct examiners of the State of ConnecticutInsurance Department at the Department's office in Hartford, Coimecticut.

The purpose of the survey examination was to evaluate the company's market conductpractices in the State of Connecticut. The examiners reviewed material supplied by thecompany, which included intemal audits, disaster recovery plans, procedures andcontrols, complaints, advertising, new business, claims, and underwriting, during theperiod of examination.

The Department's findings are as follows:

In one (1) instance, bodily injury liability claims were settled within 15 days of theloss.

In three (3) instances, claimants were not compensated for loss of use as required byConnecticut Regulations.

As it relates to the issues listed above, the company was not in compliance with applicableConnecticut Statutes and Regulations.

www.ct.gov/cidP.O. Box 816 • Hartford, CT 06142-0816

An Equal Opportunity Employer

STATE OF CONNECTICUTINSURANCE DEPARTMENT

IN THE MATTER OF: DOCKET MC 17-96

ENCOMPASS INSURANCE COMPANY OF AMERICA:

STIPULATION AND CONSENT ORDER

It is hereby stipulated and agreed between Encompass Insurance Company ofAmerica and the State of Connecticut Insurance Department by and thi'ough Katharine L.Wade, Insurance Commissioner, to wit:

I

WHEREAS, pursuant to a Market Conduct examination, the Commissioner allegesthe following with respect to Encompass Insurance Company of America;

1. Encompass Insurance Company of America, hereinafter refeired to asRespondent, is domiciled in the State of Illinois and is licensed to transactproperty and casualty insurance in the State of Connecticut. The NAIC companycode number is 10071.

2. From February 1,2017 through September 8,2017, the Department conducted anexamination of Respondent's market conduct practices in the State of Connecticutcovering the period January 1, 2015 thi'ough December 31, 2015.

3. During the period under examination, Respondent failed to follow establishedpractices and procedures to ensure compliance with statutory requirementsresulting in instances of:

a) failure to undertake to pay claims for loss of use

b) bodily injury liability claims settled within 15 days

4. The conduct desciibed in paragraph thi'ee is in violation of Sections 38a-357and 52-572(a) of the Connecticut General Statutes, and 38a-334-2(c) of theConnecticut Regulations and constitutes cause for the imposition of a fine orother administrative penalty under Sections 38a-2, 38a-817 and 38a-41 of theConnecticut General Statutes.

www.ct.gov/cidP.O. Box 816 • Hartford, CT 06142-0816

An Equal Opportunity Employer

II

1. WHEREAS, Respondent admits the allegations in paragraphs thi*ee and four ofAiticle I of this Stipulation and Consent Order; and

2. WHEREAS, Respondent agrees to undertake a complete review of its practicesand procedures, with respect to those areas of concern, as described in theMarket Conduct Report and this Stipulation, so that those areas of concern arecompliant with Connecticut Statutes; and

3. WHEREAS, Respondent agrees to provide the Insurance Commissioner with afull report of findings and a summary of actions taken to comply with therequirements of paragraph two of this Section within ninety (90) days of thedate of this document; and

4. WHEREAS, Respondent agrees to pay a fine in the amount of $5,500for the violations described herein; and

5. WHEREAS, Respondent, being desirous of terminating administrative actionwithout the necessity of a formal hearing or further litigation, does consent tothe making of this Consent Order and voluntarily waives:

a. any right to notice and a hearing; and

b. any requirements that the Insurance Commissioner's decision contain astatement of findings of fact and conclusions of law; and

c. any and all rights to object to or challenge before the InsuranceCommissioner or in any judicial proceeding any aspect, provision orrequirement of this Stipulation

NOW THEREFORE, upon the consent of the parties, it is hereby ordered and adjudged:

1, That the Insurance Department has jurisdiction of the subject matter of thisadministrative proceeding.

2. That Encompass Insurance Company of America is ordered to pay a fine in theamormt of Five Thousand Five Hundred Dollars ($5,500).

Encompass Insurance Company of America:

(llep/esentigjive of Insurance Company)Benjamin E. Lumlcao

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CERTIFICATION

The uiidefsigtied'deposes" and'says^tMt'^he/hd Ms dhiy executed this StiptilatioiT^

12thand Consent Order on this day of December, 2017, for and on

behalf of Encompass Insurance Company of America; that she/he is the attorney

of such company, and she/he has authority to execute and file such instrument.

B^jamin E^umicao

STATE OF iiij^Qjg

SS

COUNTY OF Cook

On the />"/^ day of ^ 2017, before me personallyappeared Benjamin E. Lumlcao , sealer

of the foregoing Stipulation and Consent Order, acknowledged same to be her/his act and

deed. -

OFFICIAL SEALAGNES C GO

NOTARY PUBLIC - STATE OF ILLINOISMY COMMISSION EXPtRES:03/07/21

Notary Public/Commissioner of the' Superior Court

Section Below To Be Completed by State of Connecticut Insurance Department

Dated at Haitford, Connecticut this I ^ day of 2017.

Kkharine L. WadeInsurance Commissioner

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