Whatever happened to those regulatory investigations of Safeco Insurance's business practices employed by then-CEO (2001-05) and now-Senate candidate Mike McGavick? "Nothing, as far as we>"/>
Whatever happened to those regulatory investigations of Safeco Insurance's business practices employed by then-CEO (2001-05) and now-Senate candidate Mike McGavick? "Nothing, as far as we know," says Safeco spokesperson Paul Hollie. "We submitted all the information they requested and nothing has come of it as yet."
A P-I story today recounts McGavick's successful cost-cutting measures that turned Safeco around financially, but doesn't get into the topic of outside investigations of practices that may have aided the turnaround. In 2005 and 2006, Safeco and other insurance companies faced allegations of improper payments, bid rigging, and anticompetitive industry practices in probes by more than a dozen U.S. and state regulators.
The investigations were spurred by New York Attorney General (and now gubernatorial candidate) Eliot Spitzer, who susequently obtained settlements with insurance-broker giants Marsh & McLennan, Aon and AIG. A spokesperson for NY's AG office says they can't comment on whether or not any investigations continue. Safeco, too, can't say if there are any open or closed investigations into its practices. "Nothing has moved forward as far as we know," says Hollie. "There have been no requests for follow up and no decision has been delivered to us."
Washington Insurance Commissioner Mike Kreidler undertook a review into bidding practices and broker compensation fees at 18 firms, including Safeco, the state's No. 2 insurer. In a report Kreidler issued in January that focused mostly on brokers rather than insurers such as Safeco, no widespread wrongdoing was found, says spokesperson Sandi Peck. Kreidler himself said the "investigation found some violations where brokers were not disclosing compensation arrangements with consumers, [but] the problems do not approach the magnitude or scope that was revealed at the national level." Peck says she's not aware of any other probes of Safeco although open investigations are never made public.
Safeco is in court fighting an effort by the state Democratic Party to force release of a 2003 state report on the industry's credit-scoring process, which can be used to, arguably, unfairly disadvantage customers who are most likely to file claims. McGavick backed credit scoring as a way to cut costs. The report gives more details on that method used by Safeco and two other companies.
Kreidler's office feels the report can be publicly released, as does a Thurston County Superior Court judge, but Safeco has appealed that court's recent decision, bottling up the report until after the election at least.