(The Center Square) − Liberty Mutual will refund approximately $4 million to around 138,000 Louisiana policyholders after overcharging them on a state-mandated insurance assessment, according to Louisiana Insurance Commissioner Tim Temple.
The overcharges stemmed from an error in which Liberty Mutual failed to update the Louisiana Citizens Property Insurance Corporation Emergency Assessment percentage since 2021. The Louisiana Department of Insurance became aware of the issue in February when a consumer complaint flagged an incorrect assessment charge on a Liberty Mutual renewal notice.
Upon investigation, the LDI’s Office of Consumer Services found that the company had not adjusted the assessment as required.
“I have spoken with Liberty Mutual about the issue, and they told me they corrected the error and will send refunds to all active and inactive policyholders that were impacted,” Temple said. “The LDI will monitor the company repayments to ensure policyholders receive all the funds they are due.”
The LDI is continuing to review the circumstances surrounding the miscalculation to determine if further regulatory action is necessary. However, Temple noted that the issue appears to be isolated to Liberty Mutual, and the department is working to confirm that no other insurers have made similar errors.
The emergency assessment was originally implemented to help Louisiana Citizens pay off bonds issued to cover claims from hurricanes Katrina and Rita in 2005. Over time, the assessment percentage has been gradually reduced, and in January, the Louisiana Citizens Board of Directors voted to officially end the charge as of April 2024.
Liberty Mutual stated that all payments remitted to Louisiana Citizens were correctly calculated and reported. The company has now adjusted its assessment charge to 0% for affected policyholders as of April 1.
Former or current Liberty Mutual policyholders with questions about refunds are advised to contact the company or their insurance agent for further details.
