BOSTON – A New York-based premium-financing provider has agreed to pay $160,000 to resolve allegations that it illegally canceled certain financed auto-insurance policies affecting approximately 100 Massachusetts customers, Attorney General Martha Coakley announced last week.
According to the assurance of discontinuance, AICCO Inc., a subsidiary of American International Group Inc., issued cancellation requests to insurance companies with an effective date that was three days after the date of the notice. State law requires premium-financing providers to give at least a 20-day notice to the insurance company that issues the policy.
This statute works in conjunction with other provisions to ensure that customers have adequate time to bring their accounts current before their policies lapse and they are forced to take vehicles off the road or seek replacement coverage.
Under the terms of the settlement, AICCO will make payments totaling more than $125,000 to roughly 100 customers in Massachusetts whose policies AICCO allegedly prematurely canceled or sought to prematurely cancel in violation of state law, in addition to a $35,000 payment to the commonwealth. •