Pennsylvania AG, GEICO reach agreement over policy cancellations
Pennsylvania Attorney General Dave Sunday announced an agreement with GEICO requiring the insurer to make changes to its underwriting and policy review processes following an investigation into a consumer complaint involving the cancellation of an auto insurance policy.
The investigation stemmed from a complaint filed by a new GEICO customer in West Philadelphia whose policy was canceled during the insurer’s standard 60-day review period for new policyholders. According to the Attorney General’s office, GEICO used a tool with artificial intelligence features to select the customer for additional underwriting review. The policyholder believed she had submitted the requested documentation but was not informed that her submission was incomplete, resulting in the cancellation of her policy and her unknowingly driving without insurance.
The Attorney General’s office raised concerns about the fairness and clarity of the process, particularly for lower-income consumers selected for underwriting review. It also alleged that GEICO’s final communication did not clearly explain that the documentation provided was insufficient to prevent cancellation.
Under the agreement, GEICO will act consistently with Pennsylvania Insurance Department guidance regarding the use of AI systems by insurers. The company also agreed to extend the document submission period for selected new policyholders by one week.
Additional changes include allowing consumers to provide a single proof of residency instead of two and permitting a current driver’s license to serve as proof of residency when the address matches the policy. GEICO will also provide training to customer service representatives on the updated requirements and communication standards.
“Consumers deserve transparency and fairness throughout the insurance process, especially when losing coverage can leave someone unknowingly uninsured and vulnerable to penalties and financial risk. This agreement secures meaningful improvements that will help protect policyholders, and ensures that the company’s use of new technology is done within industry standards.” – Sunday.
The settlement does not constitute an admission of wrongdoing by GEICO.
