NEW YORK STATE
DEPARTMENT OF FINANCIAL SERVICES
ONE STATE STREET
NEW YORK, NEW YORK 10004
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In the Matter of :
NATIONAL GENERAL INSURANCE GROUP, including :
NATIONAL GENERAL INSURANCE COMPANY, :
INTEGON CASUALTY INSURANCE COMPANY,
NATIONAL GENERAL ASSURANCE COMPANY, :
ADIRONDACK INSURANCE EXCHANGE,
INTEGON PREFERRED INSURANCE COMPANY, :
INTEGON NATIONAL INSURANCE COMPANY,
NEW SOUTH INSURANCE COMPANY, and :
NATIONAL GENERAL INSURANCE ONLINE INC.
:
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CONSENT ORDER
The New York State Department of Financial Services (the “Department” or “DFS”) and
National General Insurance Company, Integon Casualty Insurance Company, National General
Assurance Company, Adirondack Insurance Exchange, Integon Preferred Insurance Company,
Integon National Insurance Company, New South Insurance Company, and National General
Insurance Online Inc. (collectively, “National General Insurance Group” or the “Company”) are
willing to resolve the matters described herein without further proceedings.
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WHEREAS, the Department conducted a market conduct investigation into the business
practices of the Company, for the period from January 1, 2018, through December 31, 2018;
WHEREAS, the investigation concluded that the Company failed to timely report new
business and other vehicle registration information to the New York State Department of Motor
Vehicles (“DMV”) as required by New York Insurance Law § 317; and
WHEREAS, this Consent Order contains the Department’s findings and the relief agreed
to by the Department and the Company.
NOW THEREFORE, in connection with an agreement to resolve this matter without
further proceedings, the Department finds as follows:
THE DEPARTMENT’S FINDINGS
Introduction
1. National General Insurance Group consists of insurance companies authorized to
transact motor vehicle liability insurance business in New York State pursuant to § 1113(a) of
the New York Insurance Law and that have been issued an Insurance Company Code (“ICC”) by
the DMV.
2. The DMV’s Insurance Information & Enforcement System (“IIES”) was
developed and implemented in January of 2000 as a result of enactment of Chapter 678 of the
laws of 1997 as amended by Chapter 509 of the laws of 1998. IIES employs an insurance
information database to monitor the insurance status of New York State-registered vehicles
thereby enabling peace officers to know whether vehicles on the road lack insurance. As a public
safety matter, injured motorists rely on the benefit of statutorily required auto insurance. Thus, it
is critical that registrants provide DMV with vehicle identification numbers (“VINs”) during the
registration process and that insurance companies use the same VINs and names in their
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electronic reporting to DMV. Insured vehicle information is used to identify, sanction, and
ultimately remove uninsured vehicles from New York’s highways. IIES reporting applies to all
motor vehicles insured and registered in NYS except motorcycles.
3. Article 6 of the New York Vehicle and Traffic Law (“VTL”) requires insurers to
notify the DMV of certain transactions in accordance with regulations promulgated by the DMV
Commissioner. Part 34 of Title 15 of the New York Codes, Rules and Regulations (“NYCRR”)
implements the particular requirements of Article 6, with Section 34.4 of that regulation
providing that insurers report new business no later than seven days after the effective date of the
policy issuance. For all terminations and suspensions, insurers must report within 30 days of the
termination effective date, with the exception of for-hire vehicles, which must be reported no less
than 20 days prior to the termination effective date.
Events at Issue
4. In the latter part of 2017, the DMV notified the Department that the industry as a
whole was not timely reporting to DMV in IIES pursuant to its requirements. DMV also
informed the Department that, commencing in May 2017, DMV sent detailed quarterly
performance reports to all motor vehicle insurers displaying the totals of each company’s
reporting data and the totals and percentages of those reported late to DMV. The Department
then contacted the most delinquent and untimely insurers, seeking an explanation and
remediation.
5. National General Insurance Group was among the companies that persisted in
failing to timely report to DMV in IIES, including in 2018. Each member of National General
Insurance Group, for the time period January 1, 2018, to December 31, 2018 (the “Time
Period”), failed to timely report certain insured vehicle information to the DMV through IIES
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and failed to timely respond to DMV initiated mandatory verification notices. As a result,
National General Insurance Group violated 15 NYCRR Part 34.4, as well as 15 NYCRR Part
34.2(m) (which defines “Late Filing” as a notice not submitted within the required timeframes,
and requires insurers to take immediate corrective action when late filings exceed 10% of total
matched notices).
6. As mentioned above, accurate insurance information and timely IIES filings are
vital for purposes of law enforcement and public health and safety.
Violations of Law and Regulations
7. By reason of the foregoing, National General Insurance Group violated (i) VTL §
313, (ii) DMV Regulations, 15 NYCRR Part 34, and (iii) New York Insurance Law § 317.
NOW THEREFORE, to resolve this matter without further proceedings, the Department
and the Company stipulate and agree to the following terms and conditions:
SETTLEMENT PROVISIONS
Monetary Penalty
8. No later than ten (10) days after the Effective Date (as defined below) of this
Consent Order, the Company shall pay a total civil monetary penalty pursuant to Section 317 of
the New York Insurance Law to the Department in the amount of Seven-Hundred and Seven
Thousand Dollars and 00/100 Cents ($707,000.00). The payment shall be in the form of a wire
transfer in accordance with instructions provided by the Department.
9. The Company shall not claim, assert, or apply for a tax deduction or tax credit
with regard to any U.S. federal, state, or local tax, directly or indirectly, for any portion of the
civil monetary penalty paid pursuant to this Consent Order.
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10. The Company shall neither seek nor accept, directly or indirectly, reimbursement
or indemnification with respect to payment of the penalty amount, including but not limited to,
payment made pursuant to any insurance policy.
Remediation
11. The Company will take the necessary actions to prevent recurrences of the
violations described above, including without limitation, (i) immediate steps to determine the
reason(s) for the violations, (ii) formulation for DMV’s review and approval of a remediation
plan to correct deficiencies in its submissions to the DMV, and (iii) full implementation of such
remediation plan to mitigate late filings and required responses. Within two months from the
date of full execution of this Consent Order, the Company shall provide to DMV a written
remediation plan detailing the corrective actions taken or proposed to be taken, and the related
projected timeframes, to achieve full compliance with this Consent Order. The Company further
agrees to timely provide such reports or other information required by the Department or DMV
in connection with the violations, the remediation plan, or future filing obligations. The
Company will also take all necessary steps to comply with the New York Insurance Law and
VTL and Regulations, as the same may be or become effective at any time or from time to time,
with respect to its future DMV filing obligations.
Full and Complete Cooperation
12. The Company commits and agrees that it will fully cooperate with the Department
regarding all terms of this Consent Order.
Further Action by the Department
13. No further action will be taken by the Department against the Company or its
successors for the conduct set forth in this Consent Order, or in connection with the remediation
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set forth in this Consent Order, for the Time Period and prior thereto, provided that the Company
fully complies with the terms of the Consent Order.
Waiver of Rights
14. The Company submits to the authority of the Superintendent to effectuate this
Consent Order.
15. The parties understand and agree that no provision of this Consent Order is
subject to review in any court, tribunal, or agency outside of the Department.
Parties Bound by the Consent Order
16. This Consent Order is binding on the Department and the Company, as well as
any successors and assigns. This Consent Order does not bind any federal or other state agency
or any law enforcement authority.
Breach of Consent Order
17. In the event that the Department believes the Company to be in material breach of
the Consent Order, the Department will provide written notice to the Company, and the
Company must, within ten (10) days of receiving such notice, or on a later date if so determined
in the Department’s sole discretion, appear before the Department to demonstrate that no
material breach has occurred or, to the extent pertinent, that the breach is not material or has
been cured.
18. The Company understands and agrees that its failure to make the required
showing within the designated time period shall be presumptive evidence of the Company’s
breach. Upon a finding that a breach of this Consent Order has occurred, the Department has all
the remedies available to it under Section 317 of the New York Insurance Law, and any other
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applicable laws, and may use any evidence available to the Department in any ensuing hearings,
notices, or orders.
Notices
19. All notices or communications regarding this Consent Order shall be sent to:
For the Department:
New York State Department of Financial Services
One State Street, 20th Floor
New York, NY 10004-1511
Attention: Cynthia M. Reed, Senior Assistant Deputy Superintendent, Consumer
Protection and Financial Enforcement Division;
Jason St. John, Assistant Deputy Superintendent, Consumer Protection and
Financial Enforcement Division
For National General Insurance Group:
450 W. Hanes Mill Road
Suite 101
Winston-Salem, NC 27105
Attention: Dale Gunter, L&R-Ins Ops Attorney-Director
National General Insurance Company
Javier R. Tapia, Legislative & Regulatory Counsel
Allstate Insurance Company
Katie A. Jones, Director of Legal Compliance
Allstate Insurance Company
Miscellaneous
20. This Consent Order and any dispute thereunder shall be governed by the laws of
the State of New York without regard to any conflicts of laws principles.
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21. This Consent Order may not be altered, modified, or changed unless in writing
and signed by the parties hereto.
22. This Consent Order constitutes the entire agreement between the Department and
the Company and supersedes any prior communication, understanding, or agreement, whether
written or oral, concerning the subject matter of this Consent Order.
23. Each provision of this Consent Order shall remain effective and enforceable
against the Company, its successors, and assigns, until stayed, modified, suspended, or
terminated by the Department.
24. In the event that one or more provisions contained in this Consent Order shall for
any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provision of this Consent Order.
25. No promise, assurance, representation, or understanding other than those
contained in this Consent Order has been made to induce any party to agree to the provisions of
this Consent Order.
26. Nothing in this Consent Order shall be construed to prevent any consumer or any
other third party from pursuing any right or remedy at law.
27. This Consent Order may be executed in one or more counterparts and shall
become effective when such counterparts have been signed by each of the parties hereto (the
“Effective Date”).
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IN WITNESS WHEREOF, the parties have caused this Consent Order to be signed on
the dates set forth below.
NEW YORK STATE DEPARTMENT OF
FINANCIAL SERVICES
By: /s/ Jason D. St. John
JASON D. ST. JOHN
Assistant Deputy Superintendent for
Consumer Protection and Financial
Enforcement
July 31 , 2023
By: /s/ Christopher B. Mulvihill
CHRISTOPHER B. MULVIHILL
Deputy Superintendent for Consumer
Protection and Financial Enforcement
August 2 , 2023
By: /s/ Kevin R. Puvalowski
KEVIN R. PUVALOWSKI
Acting Executive Deputy Superintendent for
Consumer Protection and Financial
Enforcement
August 8 , 2023
INSURANCE COMPANY
By: /s/ Dale Gunter
DALE GUNTER
L&R-Ins Ops Attorney Director
NGIC
July 25 , 2023
INTEGON CASUALTY
INSURANCE COMPANY
By: /s/ Dale Gunter
DALE GUNTER
L&R-Ins Ops Attorney Director
NGIC
July 25 , 2023
NATIONAL GENERAL
ASSURANCE COMPANY
By: /s/ Dale Gunter
DALE GUNTER
L&R-Ins Ops Attorney Director
NGIC
July 25 , 2023
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EXCHANGE
By: /s/ Dale Gunter
DALE GUNTER
L&R-Ins Ops Attorney Director
NGIC
July 25 , 2023
INTEGON PREFERRED
INSURANCE COMPANY
By: /s/ Dale Gunter
DALE GUNTER
L&R-Ins Ops Attorney Director
NGIC
July 25 , 2023
INTEGON NATIONAL
INSURANCE COMPANY
By: /s/ Dale Gunter
DALE GUNTER
L&R-Ins Ops Attorney Director
NGIC
July 25 , 2023
NEW SOUTH INSURANCE
COMPANY
By: /s/ Dale Gunter
DALE GUNTER
L&R-Ins Ops Attorney Director
NGIC
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NATIONAL GENERAL
INSURANCE ONLINE, INC.
By: /s/ Dale Gunter
DALE GUNTER
L&R-Ins Ops Attorney Director
NGIC
July 25 , 2023
THE FOREGOING IS HEREBY APPROVED. IT IS SO ORDERED.
/s/ Adrienne A. Harris
ADRIENNE A. HARRIS
Superintendent of Financial Services
August 10 , 2023