MARYLAND INSURANCE ADMINISTRATION GOVERNMENT

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					MARYLAND INSURANCE ADMINISTRATION




               MARYLAND INSURANCE ADMINISTRATION
                     ALFRED W. REDMER, JR., COMMISSIONER




                     MARKET CONDUCT EXAMINATION REPORT


OF THE PROPERTY & CASUALTY BUSINESS

OF

     GOVERNMENT EMPLOYEES INSURANCE COMPANY (NAIC #22063)
             GEICO CASUALTY COMPANY (NAIC #41491)
         GEICO GENERAL INSURANCE COMPANY (NAIC #35882)
             GEICO INDEMNITY COMPANY (NAIC #22055)

                             ONE GEICO PLAZA
                          WASHINGTON, DC 20076-0001



                               Report No. 3866-03




              Examination Period: September 1, 2002 – August 31, 2003




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                                                                             ALFRED W. REDMER, JR.
                                                                                 COMMISSIONER
    ROBERT L. EHRLICH, JR.
          GOVERNOR

                                                                             JAMES V. MCMAHAN, III
                                                                              DEPUTY COMMISSIONER
     MICHAEL S. STEELE
     LIEUTENANT GOVERNOR

                                                                                 P. TODD CIONI
                                                                             ASSOCIATE COMMISSIONER


                                  State of Maryland
                             MARYLAND INSURANCE ADMINISTRATION
                     525 ST. PAUL PLACE, BALTIMORE, MARYLAND 21202-2272
                                     Writer’s Direct Dial: 410-468-2235
                                     Facsimile Number: 410-468-2289
                                   e-mail : tcioni@mdinsurance.state.md.us




The Honorable Alfred W. Redmer, Jr.
Commissioner of Insurance
State of Maryland
525 St. Paul Place
Baltimore, Maryland 21202

Dear Commissioner Redmer:

Pursuant to your instructions and authorization, a five (5) year return examination has
been made of the market conduct affairs of

                  GOVERNMENT EMPLOYEES INSURANCE COMPANY
                           GEICO CASUALTY COMPANY
                      GEICO GENERAL INSURANCE COMPANY
                          GEICO INDEMNITY COMPANY

whose home office is located at One GEICO Plaza; Washington, DC 20076. The report
of such Examination is being respectfully submitted.

Sincerely,




P. Todd Cioni, Associate Commissioner
Compliance and Enforcement Unit




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                           TABLE OF CONTENTS

                                                               PAGE

I.   EXECUTIVE SUMMARY......................................     1
II. SCOPE OF EXAMINATION...................................      2
III. COMPANY PROFILE........................................     3
IV. CERTIFICATE OF AUTHORITY...............................      4
V.   PRODUCER LICENSING.....................................     5
VI. UNDERWRITING...........................................     10
VII. RATING................. ...............................    15
VIII.CLAIMS.................................................    32
IX. SUMMARY OF FINDINGS....................................     43
X.   CLOSING................................................    45
XI. EXAMINATION REPORT SUBMISSION..........................     46
     Exhibits...............................................    47




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       I.     EXECUTIVE SUMMARY

The Maryland Insurance Administration (hereinafter referred to as "MIA") conducted a
comprehensive market conduct examination of Government Employees Insurance
Company (GEICO); GEICO General Insurance Company; GEICO Indemnity Company
and GEICO Casualty Company, (hereinafter collectively referred to as "Companies"),
resulting from the Market Conduct Report filed May 28, 1997.

The examination identified various non-compliant practices, some of which may extend
to other jurisdictions. The Company is directed to take immediate corrective action to
demonstrate its ability and intention to conduct business in Maryland according to its
insurance laws and regulations. When applicable, corrective action for other
jurisdictions should be addressed.

Section IX of the report contains a Summary of Findings. In general, the
Companies violated the following Maryland Laws and regulations during the
examination period:

•   Insurance Article §10-118 (a) (1) and 10-130 (a): Placement of business and/or
    payment of commissions with unappointed producers.
•   Insurance Article §§27-501(a) and 11-341 and COMAR plan.31.15.10.06 B:
    Terminated automobile policies eligible for rating under a filed surcharge
•   Insurance Article §27-212(d)(1): Inappropriately placed risks in Companies for
    which they were ineligible.
•   Insurance Article §§27-212(d)(1), 27-501(a)(2) and 11-341: Incorrectly assigned
    rating tiers, not designated in Companies rate filings.
•   Insurance Article §§27-212(d)(1) and 11-341: Inappropriately placed risks in
    incorrect group and/or tier.
•   Insurance Article §11-341: Renewed risks without obtaining and/or verifying variable
    rating information as required by rate filing.
•   Incorrect statistical classification.
•   COMAR 31.15.07.03 B (13) and Commissioner’s Notice and Order, dated November
    25, 1980: Failed to pay appropriate amount for title and tag transfer fees in
    settlement of total loss claims.
•   Incorrect Settlements of Claims (Lack of documentation).
•   Insurance Article §19-508(a)(1): Failed to make payment of PIP medical bills in a
    timely manner.
•   Insurance Article §19-508(c) and COMAR 31.15.07.06: Failed to pay simple interest
    of 1.5% on PIP medical bills payments made in excess of thirty (30) days. Also
    failed to make notation in claim file stating reason for delay and failed to add 1.5%
    simple interest for payments made in excess of 30 days.




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      II.    SCOPE OF EXAMINATION

A comprehensive market conduct examination has been performed on the Companies
at their regional offices in Fredericksburg, Va. and a report thereon is submitted as
follows:

The Examination was conducted pursuant to Sections 2-205, 2-207, 2-208 and 2-209 of
the Insurance Article and generally covered the period from September 1, 2002 through
August 31, 2003.

All unacceptable or non-compliant practices may not have been discovered or noted in
the Report. Failure to identify or criticize improper or non-compliant business practices
in Maryland or in other jurisdictions does not constitute acceptance of such practices.
Examination report findings that do not reference specific insurance laws, regulations,
or bulletins are presented to improve the Companies’ practices and ensure consumer
protection.

The examination and testing methodologies follow the standards established by the
National Association of Insurance Commissioners (“NAIC”) and procedures developed
by the Maryland Insurance Administration. Testing performed during the review
provides a credible basis for the findings and recommendations contained in the report.

The review was based on a total of one hundred fifty (150) underwriting files, three
hundred (300) rating files and two hundred fifty (250) claim files.




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      III.   COMPANY PROFILE

The Government Employees Insurance Company (GEICO) was reincorporated and
redomesticated on January 3, 1986 under the laws of Maryland to effect a change in
corporate domicile from the District of Columbia to Maryland. The original GEICO was
formed August 1936 in Texas, and was reincorporated in the District of Columbia in
1937 and 1979.

The GEICO General Insurance Company was incorporated on March 27, 1978 under
the temporary title “Equi - Gen Insurance Company” under the laws of Iowa. The
present name was adopted on September 29, 1982.

The GEICO Indemnity Company was incorporated on March 22, 1961 and
reincorporated in 1980 in the District of Columbia under the name of Criterion Insurance
Company. On June 25, 1986 the Company was redomiciled to Maryland and changed
its name to the present title.

The GEICO Casualty Company was incorporated on August 31, 1982 under the laws of
Maryland as the Guardian Casualty Company and the present title was adopted on
January 6, 1994.

A.M. Best assigns each company a Financial Size Category. Best's Financial Size
Category is based on reported policyholders' surplus plus conditional or technical
reserve funds, such as mandatory securities valuation reserve, other investment and
operating contingency funds and miscellaneous voluntary reserves reported as
liabilities. The Financial Size Category is represented by roman numerals ranging from
Class I (the smallest) to Class XV (the largest). The Companies’ Financial Size
Category is XV.




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      IV.    CERTIFICATE OF AUTHORITY

The Companies’ Certificates of Authority to write business in the State of Maryland were
last issued on July 1, 2003 and are currently in good standing.

The Government Employees Insurance Company is licensed in DC and all States
except NJ.

GEICO General Insurance Company is licensed in DC and all States except NJ.

GEICO Casualty Company is licensed in DC and all States except MA, MI, NJ, NC, TX,
VT and WV.

GEICO Indemnity Company is licensed in all States except MA and NJ.




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       V.     PRODUCER LICENSING

Persons listed as producers of record and/or producers who received commission/
compensation for automobile new and renewal business policies, issued during the
examination period, were compared with the licensing records of the MIA. The
individuals/entities who are noted as the soliciting producer in Section VII Rating is the
population reviewed. The individuals/entities were reviewed to determine compliance
by the Companies and their producers with the applicable licensing requirements as set
forth by the Insurance Article.

The review revealed a total of three (3) violations detailed on the following pages.




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Issue 1 - Violation of Section 10-118(a)(1) and 10-130(a).
The Companies accepted business from and provided compensation to
insurance producers that did not have an appointment from the Companies.

Section 10-103(c)(1)(2) provides:

      (c) Insurance producers – In general – Except as otherwise provided in
      this article, before a person acts as an insurance producer in the State,
      the person must obtain:
      (1) a license in the kind or subdivision of insurance for which the person
      intends to act as an insurance producer; and
      (2) If acting for an insurer, an appointment from the insurer.

Section 10-118(a)(1) provides:

      (a) In general. – (1) When an insurer doing business in the State makes or
      terminates an appointment, the insurer immediately shall file notice of the
      appointment, or termination and the reasons for the termination in the
      manner specified by this section.

Section 10-130(a) provides:

      (a) In general. - Except as otherwise provided in Sections 10-102 and 10-
      119 of this subtitle, a commission, fee, reward, rebate, or other
      consideration for selling, soliciting, or negotiating insurance may not be
      paid, directly or indirectly, to a person other than a licensed insurance
      producer.

Finding #1

The review revealed that the Companies accepted business from and provided
compensation to three (3) producers that had not obtained an appointment, as required.
The Companies are in violation of Sections 10-118(a)(1)(2) and 10-130(a) of the
Insurance Article.

AREA REVIEWED   POPULATION    SAMPLE      # OF     POLICIES BY PRODUCERS     % OF   EXHIBITS
                               SIZE    PRODUCERS   WITHOUT AN APPOINTMENT   ERROR
  AUTOMOBILE      63, 358       100         3                 3               3%       A
 NEW BUSINESS


The Companies responded:

      In regards to Findings #1, the report indicates that the review
      revealed that GEICO accepted business from and provided
      compensation to three producers that had not obtained an
      appointment.




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      We agree in part with the findings as indicated in the report;
      however, the foundation on which these findings are based do not
      accurately reflect the circumstances of the licensure and
      appointment issues for each associate in question during this time
      period. Please note that GEICO transact business directly with its
      customers via sales counselors who are employees of the company.
      GEICO provides the necessary training and resources including
      paying licensing fees of the sales counselors in Maryland. Moreover,
      since the associates are employees, GEICO is responsible for the
      conduct and actions of the sales counselor while transacting
      business on behalf of the company within the scope of their
      employment. During the time period of September 1, 2002 and
      August 31, 2003, GEICO spent approximately $43, 956 for 814 new
      licenses in the state. Additionally, from August 31, 2003, to date the
      Administration has issued 880 new licenses to GEICO costing
      approximately $47, 520.

      Further, we experienced ongoing problems with the licensure
      process by the Administration’s vendor, ASI.        Our standard
      procedure was for ASI to process both license application and
      appointments at the same time. However, the size of the biweekly
      report and the lack of responsiveness from ASI, raised concerns
      indicating that there may be a problem with the appointment
      process. This concern resulted in GEICO requesting and receiving a
      special list from ASI (ARM System License Master Report) for each
      of our four companies on August 28, 2001. In reconciling our data
      with the ASI’s reports, it became obvious that ASI was having
      difficulty processing our appointment requests.

      Equally as important, after several unsuccessful discussions with
      ASI, we thereupon engaged in dialogue with Jean Bienemann at the
      Administration regarding these ongoing issues. We agreed to
      change our business practices by applying for the Maryland license
      only, and follow up with an appointment requests after the license
      had been confirmed issued. The new process was implemented
      December 11, 2001.

      While the change in procedure appeared to have solved the problem
      for new applicants, apparently, nothing was done to correct ASI
      records for the appointment records already submitted. GEICO
      reconciled our appointment records with ASI records again on July
      31, 2002, however, the cases cited in your market conduct report
      were not corrected in that process. GEICO finally identified and
      corrected    these    appointments    issues    with   data    we
      obtained/purchased from the NIPR Producer Data Base on July 9,
      2003.



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      As a result of the frustrations and lengthy delays experienced
      regarding the aforementioned sale counselors, GEICO initiated
      measures prior to the market conduct examination to assist in
      correcting this problem. In May 2001, GEICO implemented a
      “lockout” program. Under this program, our telephone sales system
      was designed so that until a person has been licensed and appointed
      for a particular state, the system will not allow that individual to sell a
      policy in that state.

      In September 2001, GEICO implemented an appointment follow up
      program. Any appointment that has not been confirmed by the state
      within 45 days of the original request, a control task is assigned to a
      Regional Licensing Representative to follow up with the Insurance
      Department.

      In September 2001, GEICO contracted with Innovative IT Solutions
      (Sircon) to provide access to the Producer Information Network. All
      GEICO appointments for Maryland producers were submitted
      through this method beginning December 19, 2001. Submission in
      the manner provides an electronic record of the request.

      Additionally, in October 2002, GEICO entered into another contract
      with Innovative IT Solutions to obtain PDB data annually from all
      states, and compare the PDB data against our own licensure and
      appointment information. Under this program, the date is reconciled
      annually in each state.

      Therefore, GEICO respectfully request that the Findings in Issue #1
      be eliminated from the report. Equally as important, as of January 1,
      2004, Maryland ceased requiring producer appointments.

The violations remain, however, the MIA recognizes the Companies’ past
efforts to ensure appropriate licensure and appointments for their producer
staff.




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Issue 2

WITHDRAWN




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       VI.    UNDERWRITING

                A. Automobile ”Declinations” Initiated by the Companies

The Companies were requested to provide the total population of automobile
declinations initiated by the Companies during the examination period. The Companies
advised the MIA that the total number of such declinations during the examination
period was one thousand eight hundred seventy-four (1,874). This includes two hundred
seventy-five (275) from Government Employees Insurance Company (GEICO); six
hundred sixty-six (666) from GEICO General Insurance Company; four hundred eighty-
eight (488) from GEICO Indemnity Company and four hundred forty-five (445) from
GEICO Casualty Company.

Fifty (50) randomly selected claims were reviewed.

The review revealed one (1) violation detailed on the following pages.


              B. Automobile “Cancellations” Initiated by the Companies

The Companies were requested to provide the total population of automobile
cancellations initiated by the Companies during the examination period. The Companies
advised the MIA that the total number of such cancellations during the examination
period was two hundred eighty-nine (289). This includes ninety-six (96) from
Government Employees Insurance Company (GEICO); one hundred sixteen (116) from
GEICO General Insurance Company; thirty-seven (37) from GEICO Indemnity
Company and thirty-eight (38) from GEICO Casualty Company.

Fifty (50) randomly selected claims were reviewed.

No violations are noted for this area of review.


               C. Automobile “Nonrenewals” Initiated by the Companies

The Companies were requested to provide the total population of automobile
nonrenewals initiated by the Companies during the examination period. The
Companies advised the MIA that the total number of such automobile nonrenewals
during the examination period was one thousand two hundred forty-one (1,241). This
includes four hundred twenty-nine (429) from Government Employees Insurance
Company (GEICO); five hundred ninety-five (595) from GEICO General Insurance
Company; one hundred fifty (150) from GEICO Indemnity Company and sixty-seven
(67) from GEICO Casualty Company.

Fifty (50) randomly selected policies were reviewed.




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The review revealed one (1) violation detailed on the following pages.

While the above violations are described in total by area reviewed, the violations
are set forth in detail on the following pages by individual statutory code.




                     (Section left intentionally blank)




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Issue 3 - Violation of Sections 27-501(a) and 11-341 and COMAR 31.15.10.06 B.
The Companies terminated automobile policies that were eligible for rating under
the Companies' filed surcharge plan.

Section 27-501(a) provides:

      (a) In general. - (1) An insurer or insurance producer may not cancel or
      refuse to underwrite or renew a particular insurance risk or class of risk for
      a reason based wholly or partly on race, color, creed, sex, or blindness of
      an applicant or policyholder or for any arbitrary, capricious, or unfairly
      discriminatory reason.

      (2) Except as provided in this section, an insurer or insurance producer
      may not cancel or refuse to underwrite or renew a particular insurance risk
      or class of risk except by the application of standards that are reasonably
      related to the insurer’s economic and business purposes.

Section 11-341 provides:

      An insurer may not make or issue an insurance contract or policy of
      insurance of a kind to which this subtitle applies, except in accordance
      with the filings that are in effect for the insurer as provided in this subtitle.

COMAR 31.15.10.06 B provides:

      .06 Prohibition on Cancellation or Nonrenewal When Filed Rate Exists.

      Prohibition. Notwithstanding any provision of Insurance Article, Section
      27-501, Annotated Code of Maryland, or of this chapter, an insurer may
      not cancel, or refuse to renew, a risk if the insurer has a filed rate that is
      applicable to that risk.

Each of the Companies have a filed surcharge plan, referred to as their “Good Driver
Plan” (GDP), that were in force during the examination period, covering the period
9/1/2002 – 8/31/2003. The GDP’s are provided in the Companies’ “Automobile Rates
And Rules Manuals” under rule #4. Each Companies’ GDP are applicable to both new
business and renewal business risks, but provides different requirements as to the
application of driving record points. The exceptions noted below are applicable to risks
written only in Government Employees Insurance Company (GEICO) and GEICO
General Insurance Company. Their GDP expresses that the Companies can surcharge
for accidents and violations up to three (3) points and rule 4.B.2.a (1)(b) provides in
pertinent part:




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         a. Motor Vehicle Convictions

         Point shall be assigned in accordance with the following for a motor
         vehicle violation for which the applicant or any operator of the vehicle
         currently resident in the same household has been convicted during the
         experience period.

         (1) Two points shall be assigned for: …
         (b) speeding in excess of the posted speed limit by 20 miles per hour or
         more; …

Finding #3

The review revealed that the Companies, in two (2) instances, declined or nonrenewed
automobile risks that were eligible for rating under the Companies’ filed surcharge plan
(GDP). The Companies are in violation of Sections 27-501(a) and 11-341 of the
Insurance Article, and COMAR 31.15.10.06 B.

       AREA REVIEWED        POPULATION    SAMPLE SIZE   VIOLATIONS    ERROR %      EXHIBIT
AUTOMOBILE DECLINATIONS         1,874          50            1          2%               B
AUTOMOBILE NONRENEWALS          1,241          50            1          2%               C


The Companies shall demonstrate that procedures have been put in place to assure
compliance with Maryland insurance laws and regulations. The Companies shall offer
reinstatement to the affected policyholders pursuant to Section 27-505(a).1

The Companies responded:

         In Finding #3, the report indicates that in two instances, the
         Companies declined or nonrenewed automobile risks that were
         eligible for rating under the Companies’ filed surcharge plan.

         GEICO disagrees with the report’s findings. In Sample 25, under
         “New Business” Rating, GEICO declined a new business risk based
         upon unreported information. After binding the risk, the company
         obtained a Maryland District Court record that revealed a violation of
         20 miles over the speed limit, as opposed to the 10 miles over the
         speed limit as indicated on the motor vehicle report. The original
         policy would not have been offered if the applicant had revealed this

1
    Section 27-505(a) provides:

         (a) Order to accept risk or business after violation. --If the Commissioner
         finds that an insurer has violated § 27-501, §27-503, or §27-504 of this
         subtitle, the Commissioner, in addition to any other power granted by this
         article, may order the insurer to accept the risk, or accept the business, as
         appropriate.


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      information at the time of binding the risk. The applicant would have
      been offered a policy to contemplate this risk. Additionally, the law
      allows an insurer to decline a risk for any reason within the first 45
      days of the binder period. This action was taken within that
      specified time period.

      In Sample #12, “Non-renewals”, GEICO non-renewed this risk for a
      violation that is specifically outline in our underwriting guidelines,
      speed by 30 miles or more. Subsequently to the examination, GEICO
      filed, and the state approved, a clarification to our rating rules. The
      preferred companies, Government Employees Insurance Company
      and GEICO General Insurance Company, do not have a rate to
      contemplate this type of violation.

      Therefore, GEICO requests that the Findings be eliminated from the
      report.

With respect to sample #12, the violation occurred prior to the Companies
clarifying and filing the rating rules with the MIA.

With respect to sample #25, the Companies’ real reason to terminate the risk was
“…The specific reason (s) for our action is: Your violation on 3/28/00…”, not for
failure to provide information.




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       VII.     RATING

                          A. Automobile “New Business” Rating

The Companies were requested to provide the total population of automobile new
business policies rated during the examination period. The Companies advised the MIA
that the total number of such automobile new business files during the examination
period was sixty-three thousand three hundred fifty-eight (63,358). This included twelve
thousand six hundred twenty-six (12,626) from Government Employees Insurance
Company (GEICO); twenty-five thousand eight hundred seventy-one (25,871) from
GEICO General Insurance Company; thirteen thousand two hundred fifty-three (13,253)
from GEICO Indemnity Company and eleven thousand six hundred eight (11,608) from
GEICO Casualty Company.

One hundred (100) randomly selected policies were reviewed.

The review revealed a total of nine (9) violations detailed on the following pages.


                         B. Automobile “Renewal Business” Rating

The Companies were requested to provide the total population of automobile renewal
business policies rated during the examination period. The Companies advised the MIA
that the total number of such automobile renewal files during the examination period
was six hundred seven thousand one hundred fifty-five (607,155). This included two
hundred eighty-seven thousand eight hundred two (287,802) from Government
Employees Insurance Company (GEICO); two hundred forty-five thousand four hundred
sixty-two (245,462) from GEICO General Insurance Company; sixty thousand nine
hundred fifty-six (60,956) from GEICO Indemnity Company and twelve thousand nine
hundred thirty-five (12,935) from GEICO Casualty Company.

One hundred (100) policies were randomly selected policies were reviewed.

The review revealed a total of sixty-nine (69) violations detailed on the following pages.


              C. Automobile “Increase in Premiums” Initiated By The Company

The Companies were requested to provide the total population of automobile increase
in premiums initiated by the Company during the examination period. The Companies
advised the MIA that the total number of such increase in premiums during the
examination period was thirty-eight thousand six hundred eighty-five (38,685). This
included seventeen thousand one hundred sixteen (17,116) from Government
Employees Insurance Company (GEICO); sixteen thousand four hundred one (16,401)
from GEICO General Insurance Company; three thousand three hundred ninety-two




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(3,392) from GEICO Indemnity Company and one thousand seven hundred seventy-six
(1,776) from GEICO Casualty Company.

One hundred (100) policies were randomly selected policies were reviewed.

The review revealed a total of sixty-seven (67) violations detailed on the following
pages.

While the above violations are described in total by area reviewed, the violations
are set forth in detail on the following pages by individual statutory code.




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Issue 4 - Violation of Section 27-212(d)(1).
The Companies placed ineligible risks in inappropriate Companies.

Section 27-212(d)(1) provides:

      Unfair discrimination – (1) An insurer may not make or allow unfair
      discrimination between insureds or properties having like insuring or risk
      characteristics in:
      (i)    the premium or rates charged for insurance; or
      (ii)   the dividends or other benefits payable on the insurance; or
      (iii)  any of the other terms or conditions of the insurance.

The Companies provided a manual entitled “Geico Automobile Group Guide”,
containing pages with the heading “Geico Auto Group Guide To Company Placement”.
The introduction section of this manual, on page 1, effective, 05/12/00, provides the
following in pertinent part:

      The name GEICO, when used in this guide, will apply to either
      Government Employees Insurance Company or GEICO General
      insurance Company, as appropriate. Whether an acceptable preferred
      applicant is offered coverage with Government Employees Insurance
      Company or with GEICO General Insurance Company will be determined
      as follows:

      1.    Applicants employed on a full time basis by or retired from the
      Federal (including military and postal employees), state, county, or
      municipal governments are to be written in Government Employees
      Insurance Company.
      2.    Applicants with nongovernment employers (this does not include
      government retires) are to be written in GEICO General Insurance
      Company…

      Notes:

      … In states where GEICO General Insurance Company is not operating,
      Government Employees Insurance Company will apply for nongovernment
      employees as well as government employees.

      Differences exist in the Companies’ underwriting, and these differences
      should not be overlooked…

      The guidelines contained in this document, along with the state
      supplements, form the basis for your placement decisions in all states
      except Texas…




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      It is essential to maintain each company’s homogeneity of risks by the
      proper placement of business…

The guidelines and standards as expressed above, were not followed in certain
instances, as a number of risks were inappropriately placed and were not in accordance
with the Companies’ requirements for placement.

Finding #4

The review revealed that the Companies inappropriately placed risks in Companies,
which they were ineligible for placement. The Companies are in violation of Section 27-
212(d)(1) of the Insurance Article.

       AREA REVIEWED           POPULATION   SAMPLE SIZE   VIOLATIONS   % OF ERROR   EXHIBIT
 AUTOMOBILE PREMIUM INCREASE     38,685         100           8           8%          D
    AUTOMOBILE RENEWALS          607, 155       100           1           1%          E


The Companies shall demonstrate that procedures have been put in place to assure
compliance with Maryland insurance laws, regulations and the Companies general
business practices.

The Companies responded:

      In Finding #4, the report states that the review revealed that the
      companies inappropriately placed risks in companies which they
      were ineligible for placement.

      GEICO agrees in part with this Finding; however, please note that in
      11 out of 12 samples cited, there is no premium or underwriting
      difference between placement in the two companies, GEICO and
      GEICO General Insurance Company. Moreover, there is no difference
      in the Rating Plans or Reunderwriting Plan that would have
      adversely affected these policyholders. As an accommodation to the
      Administration, we have taken the initiative to correct these policies
      reflecting the appropriate company based upon occupation
      information.

      Traditionally, it was not GEICO’s procedure to cancel and rewrite
      policies solely for changes in occupation from government to non-
      government occupations, or vice versa. GEICO practice is to make
      this determination at new business or reissue, and not to move
      policyholders back and forth whereas it poses unnecessary
      processing resources. The manual’s referred to in the report apply
      to New Business underwriting and not to renewal.

      In Sample #4, “Automobile Premium Increases” Section, the actual
      occupation for this insured should be group 2 not group 1. After


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      updating this occupation code, this policy still would not qualify for a
      better premium as a result of poor payment history.

      Sample #75, the policy indicates that this insured as a municipal
      employee; therefore, this policy should be coded under the
      Government Employees Insurance Company.

      Sample #83, this policy of 31 years was written before the existence
      of GEICO General; therefore, the placement in GEICO is valid. It was
      not the company practice to rewrite all nongovernment affiliated
      policies written prior to 1978 based solely on employment status.

      In Sample #18, “Automobile Renewals” Section, this policy of 30
      years was also written before the existence of GEICO General;
      therefore, the placement in GEICO is valid. Again, it was not the
      company’s practice to rewrite all nongovernment affiliated policies
      prior to 1978 based solely on employment status.

      Therefore, GEICO respectfully request that these corrections be
      added to the report.

As a result of the Companies’ response:

(1) Automobile Premium Increases

Sample 4: Agree to remove.

Sample 75: Will not agree to remove since specific questions regarding Insured’s
occupation were not clarified as to government status. Company agreed GEICO
General is appropriate company.

Sample 83: Will agree to remove as GEICO General did not exist when policy was
written and the past practice was not to rewrite under these circumstances.

(2) Automobile Renewals

Sample 18: Agree to remove for same reason as in Sample 83 above.




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Issue 5 - Violation of Sections 27-212(d)(1), 27-501 (a)(2) and 11-341.
The Companies incorrectly assigned rating tiers to policies not designated in
their rate filings.

Section 27-212(d)(1) provides:

      Unfair discrimination – (1) An insurer may not make or allow unfair
      discrimination between insureds or properties having like insuring or risk
      characteristics in:
      (iv)   the premium or rates charged for insurance; or
      (v)    the dividends or other benefits payable on the insurance; or
      (vi)   any of the other terms or conditions of the insurance.

Section 27-501(a)(2) provides:

       (2) Except as provided in this section, an insurer or insurance producer
      may not cancel or refuse to underwrite or renew a particular insurance risk
      or class of risk except by the application of standards that are reasonably
      related to the insurer’s economic and business purposes.

Section 11-341 provides:

      An insurer may not make or issue an insurance contract or policy of
      insurance of a kind to which this subtitle applies, except in accordance
      with the filings that are in effect for the insurer as provided in this subtitle.

The Companies assign rating tiers, along with corresponding rating factors, in their
placement of automobile risks. Once Company placement is determined, rating factors
corresponding to the selected tier, are then utilized to modify the base premium.
However, in the exceptions indicated below, the Companies’ “Customer Service
System” indicated policies with a “Tier 0” designation, when no such tier is designated in
the Companies' rate filing; therefore tier “0” is invalid and the premiums charged these
risks may be incorrect.

Finding #5

The review revealed that the Companies assigned rating tiers to policies not designated
in their filings. The Companies are in violation of Sections 27-212(d)(1), 27-501(a)(2)
and 11-341 of the Insurance Article.

       AREA REVIEWED           POPULATION    SAMPLE SIZE    VIOLATIONS   % OF ERROR       EXHIBIT
 AUTOMOBILE PREMIUM INCREASE      38,685         100            5            5%             F
    AUTOMOBILE RENEWALS          607, 155        100            6            6%             G




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The Companies should re-evaluate these risks for tier placement in accordance with the
Companies' rate filings. The Companies shall demonstrate that procedures have been
put in place to assure compliance with Maryland insurance laws and regulations.

The Companies responded:

      Finding #5, the report indicates that the Companies assigned rating
      tiers to policies not designated in their filings.

      GEICO agrees in part with this Finding; however, please note that tier
      “O” policies consist of business written prior to the implementation
      and approval of tier rating.        When tier rating was initially
      implemented, the Companies procedure was to place all prior
      business in tier “O” to note business that had not been underwritten
      under the tier guidelines. All business in tier “O” is charged
      premiums equal to the base rate (1.00) tier in all companies. The
      premiums are the same as the file rates for the base tier.

      GEICO has implemented the necessary process to convert all
      remaining tier “O” business to the corresponding filed tier at the
      next renewal cycle.

As a result of the conversion process at renewal, in the event the Companies
determine an insured has been overcharged, appropriate restitution should be
made to the policyholder.




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Issue 6 - Violation of Sections 27-212(d)(1) and 11-341
The Companies inappropriately placed risks in incorrect group and/or rating tier.

Section 27-212(d)(1) provides:

       Unfair discrimination – (1) An insurer may not make or allow unfair
       discrimination between insureds or properties having like insuring or risk
       characteristics in:
       (vii) the premium or rates charged for insurance; or
       (viii) the dividends or other benefits payable on the insurance; or
       (ix)   any of the other terms or conditions of the insurance.

Section 11-341 provides:

       An insurer may not make or issue an insurance contract or policy of
       insurance of a kind to which this subtitle applies, except in accordance
       with the filings that are in effect for the insurer as provided in this subtitle.

The Companies use a scoring system to determine eligibility for company and tier
placement, with employment considered as the factor of primary importance. Each risk
is assigned to a specific employment classification, with some less populated
classifications grouped together with other similar classifications for statistical purposes.
Each of these specific classifications or statistical groups is in turn, based on
experience, assigned to one of eight employment groups. In the scoring system, each
employment group has an assigned number of points that correspond to desirability of
risk. The points play a significant role in determining company and tier placement. The
examiners found that a number of policies were assigned to employment groups that
were either lower or higher than warranted.

Finding #6

The review revealed that the Companies, inappropriately placed risks in incorrect
groups and/or rating tiers. The Companies are in violation of Sections 27-212(d)(1) and
11-341 of the Insurance Article.

       AREA REVIEWED           POPULATION    SAMPLE SIZE    VIOLATIONS    % OF ERROR       EXHIBIT
  AUTOMOBILE NEW BUSINESS         63,358         100            8             8%             H
AUTOMOBILE PREMIUM INCREASE       38,685         100            24            24%             I
    AUTOMOBILE RENEWALS          607,155         100            32            32%             J


The Companies should re-evaluate these risks for proper group assignment, company
and tier placement. The Companies shall demonstrate that procedures have been put in
place to assure compliance with Maryland insurance laws and regulations.

The Companies responded:




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      Finding #6, the report indicates that the Companies inappropriately
      placed risks in incorrect groups and/or rating tiers.

      GEICO disagrees with these Findings and would appreciate if these
      corrections are added to the report.

      In the Automobile New Business Section, Sample #22, the current
      policy system for this policy indicates occupation as “GS 11+, group
      1”. Federal Employees and above qualify for an additional discount.
      Prior to implementation to OASIS, the failure to code this occupation
      as a federal employee would jeopardize application of this discount.
      OASIS now allows the capability to code specific occupation and
      federal grade level separately. Federal status GS-11 and above will
      still take precedence for assignment of profiles, over the specific
      occupation’s profile.

      Sample #46, pursuant to our occupational guidelines, skilled artisans
      who are married with a working spouse should be coded as group 3.
      In this case, the insured is a mechanic with a working spouse and
      the group 3 coding is accurate.

      Sample #53, please note that there were no requests to explain
      occupational information on this policy.

      Sample #60, the insured is not a Program Management Expert. The
      insured is a Program Management Counselor for family and children.
      This information is listed in our new policy system (OASIS) that was
      implemented in May 2003. Additionally, the insured’s policy was
      reissued as a result of non-pay cancellation in June 2004, at which
      time occupation was verified. The Companies were not requested to
      explain occupational information in the Administration’s referral
      regarding this policy.

      In the Automobile Premium Increase Section, we would like to note
      for the record that GEICO did not receive referrals request for
      responses regarding Samples 3, 25, 62, 67 and 78.

      Please note that GEICO disagrees with the following findings and
      would request that these corrections are added to the report.

      Sample #3, Federal Employees GS-11 and above qualify for an
      additional discount. Prior to the implementation of OASIS, failure to
      code this occupation as a federal employee would jeopardize the
      application of this discount. OASIS now allows the capability to
      code specific occupation and federal grade level separately.




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      Sample #6, the policy indicates that the insured’s specific
      occupation as Tax Examiner. The insured is a GS-11 Federal
      Employee and such employee qualifies for an additional discount.
      The above stated rational in Sample #3 is also applicable here.

      Sample #25, pursuant to our policy log notes on June 17, 2003, the
      insured is a GS-11 and is a group 1. This information was available
      during the examination period. The same rational regarding GS-11
      employees as indicated above is also applicable here.

      Sample # 78 policy number listed is not valid.

      Sample #95, policy is coded as Federal Employee, group 3. This
      policyholder is a programmer and a Federal Employee GS-7. Prior to
      OASIS, federal job codes were used to insure eligibility for
      government related discounts as indicated in the prior samples.

      In the Automobile Renewals Section, GEICO did not receive referral
      request for responses regarding Samples 5, 57 and 64.

      Sample #38, the insured is coded as retired military because at the
      time of application, 49 years ago, GEICO General was not in
      existence. Additionally, the insured was employed at the Army
      Times Publishing Company as indicated on the application.

      Sample #50, the insured spouse is enlisted military. The original
      query from the Administration of March 3, 2004 acknowledges the
      spouses occupation as such. The spouse is an E-6, per OASIS. The
      occupation grouping is correct to apply the military discount.

      GEICO has used renewal questionnaires over the years to gather
      information from policyholders. The questionnaires requested
      specific information regarding the insured’s vehicle, operation of the
      vehicle, any additional individual residing in the household including
      children with learner’s permit, estimate annual milage, driving
      record, discounts and telephone numbers. Please note that the
      questionnaires also requested information regarding the insureds
      occupation, employer, federal and military status/grade and marital
      status. In the companies’ experience, policyholders often choose
      not to respond to the questionnaire. If returned, the questionnaires
      were often incomplete.

      To accommodate and address various comments asserted by the
      Administration, as of April 28, 2004, GEICO has developed a process
      for mailing, over the course of six months, renewal questionnaires to




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      all Maryland policyholders who have been insured with the
      companies for more than one year….

      …The renewal questionnaires GEICO used in the past expressly
      requested policyholders to “answer all questions” to help GEICO
      “assure that your auto policy information is up-to-date and
      accurate”. Current “occupation and employer” is among the policy
      information that the renewal questionnaires seek from policyholders.
      Nevertheless, to address the Administration’s comments, the
      questionnaires have been revised as follows, effective June 15, 2004
      to further encourage policyholders to update occupation
      information:

            “Please update the following information, including
            occupation and employer information. You may qualify for
            additional BENEFITS and DISCOUNTS based on your
            employer or professional affiliations”. ( See Exhibit A)

      Once this mailing has been completed, the companies will forward
      renewal questionnaires to policyholders every 3 years upon renewal.
      The companies also will instruct service agents to collect and update
      occupation information on telephone calls initiated by our insureds.
      Additionally, our customer service personnel are being trained to
      update occupation on policies that transfer to Maryland from other
      states. GEICO’s new computer system, OASIS, automatically
      reassigns occupation profiles at endorsement and renewal as
      occupations are reclassified or added to our databases. OASIS also
      documents the fact that questionnaires have been forwarded to
      policyholders. We reserve the right to adjust Re-underwriting
      guidelines that may negate the utility for this procedure in the future.

As a result of the Companies’ response:

(1) Automobile New Business

Sample 22: Agree to remove because it was included in error on this particular
issue.

Sample 46: Will not agree to remove. No query was presented as queries were
presented for several other samples with the same circumstances. Group 9 is for
retired military. This risk was specifically stated in CAU to be non-military.

Sample 60: Will agree to remove as the sample incorrectly appeared under this
specific issue. However, “program management expert” was the job definition
chosen on the new business application.




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(2) Automobile Premium Increase

Samples 3, 25, 62 and 78: No queries were necessary as other queries provided
responses that covered the same scenarios.

Sample 3: Will agree to remove. However, policy should be specifically coded to
the “Federal Employee GS-11 and Above” classification.

Sample 6: Will agree to remove.

Sample 25: Will agree to remove with the new information about insured’s
specific job grade. However, policy should be recoded to the “GS 11 and above”
category.

Sample 78: Correct policy number is 53890500. Will not agree to remove as risk
was placed in incorrect employment group.

Sample 95: Will not agree to remove as a review of the new business application
specifically indicated no government affiliation at the time policy was written on
4/30/03.

(3) Automobile Renewals

Samples 5, 64: No queries were necessary as other queries provided responses
that covered the same scenarios.

Sample 57: A query was presented (copy attached). Response indicated
occupation group was incorrect so will not agree to remove.

Sample 38: Will agree to remove.

Sample 50: Will agree to remove.




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Issue 7 - Violation of Section 11-341
The Companies wrote and/or renewed risks, without obtaining and/or verifying
the rating variable information as required by their rate filings.

Section 11-341 provides:

      An insurer may not make or issue an insurance contract or policy of
      insurance of a kind to which this subtitle applies, except in accordance
      with the filings that are in effect for the insurer as provided in this subtitle.

With respect to initial company and tier placement, in certain instances information was
not specific enough to assure that the correct employment classification was included in
the scoring process. On subsequent renewal policies, including premium increase
renewals, after the risk was initially placed, there was no updated information by way of
questionnaires or records of telephone conversations that could potentially improve the
risks’ characteristics profiles and thus make them eligible for a more preferred company
or better tier placement. Maryland’s “Best Price” rule, which stems from authority
granted under Sections 27-501 and 27-212, states “An individual insurer or insurance
group consisting of multiple insurers must always place a consumer in the most
favorably priced (least expensive) insurer/tier for which the consumer qualifies.” On a
number of policies reviewed, risk characteristics have not been updated in several
years, if at all, thus denying insureds the opportunity for improved tier placement and
lower premiums.

Finding #7

The Companies failed to obtain and/or verify necessary information to assure proper
company and tier placement, or to ascertain that insureds were placed in the best
possible tier for which they qualify. The Companies are in violation of Section 11-341 of
the Insurance Article.

       AREA REVIEWED           POPULATION    SAMPLE SIZE   VIOLATIONS   % OF ERROR    EXHIBIT
   AUTOMOBILE NEW BUSINESS        63,358         100           1            1%            K
 AUTOMOBILE PREMIUM INCREASE      38,685         100           30          30%            L
    AUTOMOBILE RENEWALS          607,155         100           30          30%            M


The Companies will begin implementing a new declaration page on March 10, 2005.
The declaration page will list the occupation and education for the named insureds and
request the insureds to contact the Companies if the information is incorrect.

The Companies responded:

      Finding #7 the report states that the Companies failed to obtain
      and/or verify necessary information to assure proper company and
      tier placement, or to ascertain that insureds were placed in the best
      possible tier for which they qualify.



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      In the Automobile Premium Increase Section, please note that GEICO
      did not receive referrals request for responses regarding Samples
      19, 25 and 78.

      GEICO disagrees with the following samples and respectfully
      requests that these corrections be added to the report:

      Sample #15, the insured had been rated for and charge appropriate
      premium for married rate class since reporting her marriage to the
      Company. The insured is classified as teacher which is a group 1
      occupation, the best possible occupation code. The insured has
      been rated in a discounted tier for several renewals.

      Sample #18, this policy was reissued on February 25, 2004. Our
      policy log update indicates that the insured now group 3, Assistant
      Manager. GEICO’s procedure is to update occupation at reissue.

      Sample #25, our policy log indicates that on June 17, 2003, the
      policyholder’s occupation was updated to GS-11. This information
      was verified on a routine Customer Service call.

      Sample #73, our policy log indicates that April 25, 2003, the insured’s
      occupation was verified as “retired secretary’ when he inquired
      about an umbrella policy. GEICO’s procedure is to verify occupation
      prior to issuing an umbrella policy.

      Sample #78, the policy # is invalid. GEICO did not receive a referral
      for this sample to verify the policy number.

      In the Automobile Renewals Section, the Companies did not receive
      referrals requests for responses regarding samples 5, 9, 29, 30, 31,
      34, 64 and 81.

      Sample #3, our policy log indicates that on January 2003, the insured
      is a retired federal employee and the spouse is a clinical worker. This
      information was verified during review for an umbrella policy.

      Effectively April 28, 2004, GEICO implemented the procedures as
      outlined in the aforementioned Findings #6 to accommodate the
      Administrations concerns on an ongoing basis.

As a result of the Companies’ response:

(1) Automobile Premium Increase




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Samples 19, 25, 78: No queries were necessary as other queries provided
responses that covered the same scenarios.

Sample 15: Will agree to remove.

Sample 18: Will agree to remove.

Sample 25: Will not agree to remove because as of the 3/10/03 effective date there
was no current information in file since 1999 to verify insured’s occupation.

Sample 73: Will not agree to remove as this retiree was not a government
employee and query response indicated group 4, not 9, as correct placement.

Sample 78: Correct policy number is 53890500. Will not agree to remove because
most current documentation on insured’s occupation was at least 10 years old
when the policy renewed on 4/29/03.

(2) Automobile Renewals

Samples 5,9,29,30,31,34,64,81: No queries were necessary as other queries
provided responses that covered the same scenarios.

Sample 3: Will agree to remove.




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ISSUE 8 – Analysis: Violation of Section 27-605 (c)
The Companies failed to send the required Premium Increase Notice.

Section 27-605(c) provides:

      (c) Same --- Notice of proposed action. --- (1) At least 45 days before the
      proposed effective date of the action, an insurer that intends to take an
      action subject to this section must send written notice of its proposed
      action to the insured at the last known address of the insured:

During the course of the Market Conduct review, the Examiners received a recently
resolved complaint, dated December 12, 2003, from the MIA’s Consumer Complaint
Unit, regarding the Companies failure to send the proper surcharge notification to a
policyholder. The MIA’s Consumer Complaint Unit determined the Companies did not
send proper notification and were in violation of the above referenced Section.

Although this complaint was beyond the examination period, the Examiners reviewed
the complaint and queried the Companies as to why proper notification was not sent to
the policyholder; how many other polices were affected and has corrective action been
taken. The Companies subsequently advised, “…on 2 consecutive days in December
2003, the system failed to kick out notices of policies that needed to receive Premium
Increase notices upon renewal…” They further advised that the problem had not been
discovered prior to our request, and they have changed the program logic to address
the problem that caused the failure. Additionally, the Companies disclosed that one
hundred forty-seven (147) policies actually received a surcharge without the proper
notification, and they removed the applicable surcharges from these policies.

Finding #8

The review revealed that the Companies failed to send the required notice of premium
increase. The Companies are in violation of Section 27-605(c) of the Insurance Article.

The Companies responded:

      GEICO agrees with this finding. When OASIS was implemented in
      Maryland in 2003, a new system was also being implemented to
      identify Premium Increases cases. During the examination, GEICO
      discovered a problem with this system resulting in these findings.
      The program logic was modified in February 2004 to eliminate this
      problem. Our systems department also added program language to
      advise the underwriting department if this job ever fails again, for
      any other reason. In such instances, premium increase cases will be
      verified manually for processing of notices.




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      However, as a result of our system problem, surcharges totaling $14,
      455.10 were removed from the insureds premium when this problem
      was discovered.




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       VIII. CLAIMS

                           A. Automobile “Total Loss” Claims

The Companies were requested to provide the total population of private passenger
automobile “Total Loss” claims reported during the examination period. The Companies
advised the MIA that the total number of such claims during the examination period was
thirteen thousand five hundred ninety-nine (13,599). Including six thousand three
hundred ninety-two (6,392) from Government Employees Insurance Company (GEICO);
five thousand four hundred ninety-nine (5,499) from GEICO General Insurance
Company; one thousand eighty-three (1,083) from GEICO Indemnity Company and six
hundred twenty-five (625) from GEICO Casualty Company.

One hundred (100) randomly selected claims were reviewed.

The review revealed a total of twelve (12) violations detailed on the following pages.


                       B. Automobile “Uninsured Motorist” Claims

The Companies were requested to provide the total population of private passenger
automobile “Uninsured Motorist Property Damage” claims reported during the
examination period. The Companies advised the MIA that the total number of such
claims during the examination period was six thousand one hundred fifty-nine (6,159).
Including two thousand eight hundred eighty (2,880) from GEICO General Insurance
Company; two thousand three hundred five (2,305) from Government Employees
Insurance Company; six hundred twenty-seven (627) from GEICO Indemnity Company
and three hundred forty-seven (347) from GEICO Casualty Company.

Fifty (50) randomly selected claims were reviewed.

No violations are noted for this area of review.


                            C. Automobile “PIP Only” Claims

The Companies were requested to provide the total population of private passenger
automobile “PIP only” claims reported during the examination period. The Companies
advised the MIA that the total number of such claims during the examination period was
thirty seven thousand fifty-eight (37,058). Including sixteen thousand nine hundred
eighty-seven (16,987) from GEICO General Insurance Company; fifteen thousand three
hundred forty-four (15,344) from GEICO Insurance Company; three thousand one
hundred thirty-seven (3,137) from GEICO Indemnity Insurance Company and one
thousand five hundred ninety (1,590) from GEICO Casualty Insurance Company.

One hundred (100) randomly selected claims were reviewed.



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The review revealed a total of twenty-eight (28) violations detailed on the following
pages.




                      (Section left intentionally blank)




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ISSUE 9 – Noncompliance with Insurance Commissioner’s Notice and Order,
Dated 11/25/80; and Violation of COMAR 31.15.07.03 B (13).
The Companies failed to pay the appropriate amount for title and tag transfer fees
in their settlements of total loss claims.

The Maryland insurance Commissioner’s Notice and Order, dated November 25,
1980, to all Insurance Companies licensed to do business in Maryland, provides:

       It is the interpretation of this Division that the Maryland State Excise tax
       based on the value of the damaged vehicle and transfer fees are proper
       inclusions.

       It is therefore ORDERED that any property damage liability settlement for
       the total loss of a vehicle include indemnification for the Maryland State
       Excise Tax based on the value of the damaged vehicle and transfer fees.
       Such claims settlements made on or after the date of this Order shall
       conform to the above direction.

COMAR 31.15.07.03 B (13) provides:

       B. A prohibited unfair claim settlement practice occurs if an insurer
       commits one or more of the following acts with such frequency as to
       indicate a general business practice:

       (13) Refuses to fully satisfy claims for arbitrary or capricious reasons.

The Companies paid incorrect amounts for title and transfer fees in their total loss
settlements. The appropriate amount is thirty-three dollars ($33.00), which includes the
title fee of twenty-three dollars ($23.00) and ten dollars ($10.00) for the transfer fee.
The Companies, in four (4) instances when the owner retained the salvage, failed to pay
an amount for the title and tag transfer fee. In three (3) instances, the Companies paid
twenty-eight dollars ($28.00) in title and tag transfer fees. In November of 2002, due to
a complaint letter received by the Companies, they realized a fee increase of five dollars
($5) had occurred. The Companies took a proactive approach and reviewed all total
loss cases where the fee amounts had increased from January 1, 2002 to November
30, 2002. Upon completion of the review, approximately seven thousand five hundred
checks in the amount of five dollars ($5) were issued to their customers to rectify the
issue. The Companies, in three (3) instances when there was a total loss due to a
stolen vehicle, failed to pay the ten dollars ($10) tag transfer fee. In addition, the
Companies failed to pay the title transfer fee for one (1) of the stolen vehicle total loss
claims. It was the Companies' stance that a tag transfer would not be applicable in theft
claims. The Companies currently pay all fees associated with the tax and tag transfer
fees in the settlement of total loss theft claims.




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Finding #9

The review revealed that the Companies failed to pay the appropriate amount for title
and transfer fees in their settlements of total loss claims. The Companies are in
noncompliance with the Insurance Commissioner’s Notice and Order, dated November
25, 1980, and in violation of COMAR 31.15.07.03 B(13).

       AREA REVIEWED             POPULATION   SAMPLE SIZE   VIOLATIONS   ERROR %   EXHIBIT
AUTOMOBILE “TOTAL LOSS” CLAIMS     13,599         100           10         10        N


The Companies shall make appropriate restitution to the claimants and demonstrate
that procedures have been put in place to assure future compliance with Maryland's
insurance laws and regulations.

The Companies responded:

       …the report indicates that the Companies failed to pay the
       appropriate amount for title and transfer fees in their settlement of
       total loss claims.

       GEICO disagrees with the findings in Samples 7, 15, 48, 65 and 77.
       GEICO did not pay title/tag fees on vehicles that were seven model
       years or older where the salvage was retained by the customer as
       indicated in Ms. Deborah A. Rogers memo. (See Exhibit B) Therefore,
       the customer did not suffer any financial loss in this case due to
       MVA not requiring notification of these vehicles being declared a
       total loss.

       As a result of new regulations, GEICO is paying the fees on all cases.
       GEICO disagrees with the finding in Samples 60, 74 and 80. This
       issue was discovered in November 2002 and GEICO took a proactive
       approach in reimbursing the customers that were affected by our
       oversight.

       GEICO agrees with the findings in Samples 61 and 84. GEICO
       started paying tag fees on total theft vehicles in October of 2003.
       Before that date, it was GEICO’s position that the customer could not
       transfer the tags on un-recovered cases because the tags were
       stolen with the vehicle.

Samples #7, 15, 48, 65, and 77 shall remain in the report. It has been the MIA’s
stance that all total loss claims, regardless of the age of the vehicle that the
claimant is entitled to the title and tag transfer fees.

Samples #60, 74, and 80 shall remain in the report. The Companies failed to pay
the appropriate $33 title and tax transfer fees.



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ISSUE 10– Incorrect Settlement of Claims.
The Companies failed to provide documentation to substantiate the correct
settlement value was determined on a total loss claim.

Finding #10

The review revealed that the Companies, in one (1) instance, failed to provide the
Certified Collateral Corporation (CCC) Valuation that determines the Actual Cash Value
(ACV) of the total loss claim. Therefore, the examiners were unable to determine if the
“ACV” was properly calculated.

       AREAS REVIEWED            POPULATION   SAMPLE SIZE   VIOLATIONS   ERROR %   EXHIBIT
AUTOMOBILE "TOTAL LOSS" CLAIMS     13,599         100           1           1        O


The Companies shall demonstrate that procedures have been put in place to assure the
appropriate documentation is stored and saved and can readily viewed for the purpose
of examination.

The Companies responded:

       …the report indicates that the Companies failed to provide
       documentation to substantiate the correct settlement value
       determined on a total loss claim.

       GEICO agrees with this finding.




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ISSUE 11 – Violation of Section 19-508 (a)(1). The Companies failed to make
payment on PIP medical bills within thirty (30) days of receiving satisfactory proof
of the claim.

Section 19-508 (a)(1) provides:

      (a) In general. – (1) Subject to paragraphs (2) and (3) of this subsection,
      an insurer shall make all payments of the benefits described in §19-505 of
      this subtitle periodically as claims for the benefits arise and within 30 days
      after the insurer receives satisfactory proof of claim.

The Companies failed to make payments on PIP medical bills within thirty (30) days of
receiving satisfactory proof of claims.

Finding #11

The review revealed that the Companies failed to make PIP payments within thirty (30)
days of receiving satisfactory proof of claim. The Companies are in violation of Section
19-508(a)(1).

           AREAS REVIEWED         POPULATION   SAMPLE SIZE   VIOLATIONS   ERROR %   EXHIBITS
  AUTOMOBILE “PIP ONLY” CLAIMS      37,058         100           18         18         P
 AUTOMOBILE “TOTAL LOSS” CLAIMS     13,599         100           1           1         Q


The Companies shall demonstrate that procedures have been put in place to assure
compliance with Maryland's insurance laws and regulations.

The Companies responded:

      (The finding) indicates that the Companies failed to make payment of
      PIP medical bills within 30 days of receiving satisfactory proof of the
      claim.

      GEICO agrees with this finding. Please see below response.

For findings 11 and 12, the Companies further state:

      …GEICO’s claims training class has been modified to improve our
      handling of PIP claims.       This modification includes a greater
      emphasis on making timely payments, and if appropriate, submitting
      interest payments.       The claims manager has addressed the
      importance of following company procedures for handling PIP
      claims with all PIP claims adjusters.

      GEICO has conducted several reviews since the Market Conduct
      Review and will continue periodic reviews to ensure that company


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      procedures are being followed. Claims Home Office audit conducted
      in 2004 revealed that claims payments were being timely issued.




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ISSUE 12 – Violation of Section 19-508 (c) and COMAR 31.15.07.06
The Companies failed to pay 1½ percent simple interest on PIP medical bills paid
more than thirty (30) days after receipt of satisfactory proof of claim.

Section 19-508 (c) provides:

       (c) Interest on overdue payments. – Payments of benefits that are not
       made in accordance with this section and that are overdue shall bear
       simple interest at the rate of 1.5% per month.

COMAR 31.15.07.06 provides in part:

       Whenever a claim for benefits under Insurance Article, §19-505…is paid
       more than 30 days after receipt of a properly completed claim form or
       other proof of loss and satisfactory proof verifying the claim, the insurer
       shall:

       A. Make a notation in the insurer’s claim file stating the reason for the
       delay; and

       B. Add to the amount otherwise payable 1½ percent simple interest per
          month for those days in excess of the 30 days.

The Companies failed to pay the interest required due to the delay in payment.
Additionally, the Companies failed to document their files to indicate the reason for the
delay.

Finding #12

The review revealed that the Companies failed to pay the simple interest due and/or
document the file stating the reason for the delay on PIP claims paid more than thirty
(30) days after receipt of satisfactory proof of claim. The Companies are in violation of
Section19-508(c) and COMAR 31.15.07.06

            AREAS REVIEWED       POPULATION   SAMPLE SIZE   VIOLATIONS   ERROR %   EXHIBIT
  AUTOMOBILE “PIP ONLY” CLAIMS     37,058         100           10         10        R


The Companies shall demonstrate that procedures have been put in place to assure
compliance with Maryland's insurance laws and regulations.

The Companies responded:

       (The finding) indicates that the Companies failed to pay simple
       interest due and/or document the file stating the reason for the delay
       on PIP claims paid more than thirty days after receipt of satisfactory
       proof of claim.


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For findings 11 and 12, the Companies responded:

      …GEICO’s claims training class has been modified to improve our
      handling of PIP claims. This modification includes a greater
      emphasis on making timely payments, and if appropriate, submitting
      interest payments.       The claims manager has addressed the
      importance of following company procedures for handling PIP
      claims with all PIP claims adjusters.

      GEICO has conducted several reviews since the Market Conduct
      Review and will continue periodic reviews to ensure that company
      procedures are being followed.        Claims Home Office audit
      conducted in 2004 revealed that claims payments were being timely
      issued.




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ISSUE 13 – Analysis
The Companies Maryland Economic Loss Protection Law Cover Letter

Upon receipt of notification of a PIP Claim the Companies mail the claimant a PIP
package. The package contains a letter (form CL197MD) that informs the claimant that
notice has been received of possible injuries due to an accident and to complete the
attached forms by a specific date in order to receive PIP benefits. The forms included
are the Maryland Economic Loss Protection Law Cover Letter, Application for Benefits-
Economic Loss Protection Form, Attending Physician’s Report Form, Wage and Salary
Verification Form and a return envelope. The CL197MD form letter does provide a
specific date in which the claimant should return the form and refers the claimant to
read the attached Maryland Economic Loss Protection Law Cover Letter. The
Companies’ Maryland Economic Loss Protection Law Cover Letter informs the Claimant
to return the form “by the above date” however the Companies do not provide the
specific date on the form.

The form states in part:

      IMPORTANT: This application must be completed, signed and returned to
      us not later than      see # 1 Below.

      1. Complete the enclosed “Application for Benefits-Economic Loss
      Protection” form, sign at all places indicated and return the form to us as
      soon as you can.

      Note: Do not delay returning the form because you do not have all the
      information requested. Failure to return the properly completed
      “Application for Benefits-Economic Loss Protection” form by the above
      date may result in your being unable to obtain benefits under the Maryland
      Personal Injury Protection Amendment.

The Companies failed to provide the specific due date on their Maryland Economic Loss
Protection Law Cover Letter informing the claimant of the last possible date to return the
form.

Finding #13

The review revealed that the Companies’ Maryland Economic Loss Protection Law
Cover Letter has a space to indicate the specific date a PIP application must be signed,
and returned to the Companies, however, the Companies do not complete the form by
providing the date.

The Companies responded:

      (The finding) indicates that the Companies failed to provide the
      specific due date on their Maryland Economic Loss Protection Law



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      Cover Letter informing the claimant of the last possible date to return
      the form.

      GEICO disagrees with this finding as a copy of our cover letter was
      presented to the auditors during the Market Conduct Examination.
      The cover letter clearly states the date that the PIP application must
      be returned to the GEICO to receive benefits. The examiners were
      informed that each PIP application is mailed with the attached cover
      letter. The cover letter is system generated pre-filling the date the
      application must be returned to GEICO. The examiners indicated
      that the cover letter met the requirements during the exam.

The MIA has indicated that the Economic Loss Protection Law Letter contains an
area that indicates that the PIP application must be returned in order to receive
the PIP benefits. The Companies leave the area blank, failing to indicate the
specific date that the application must be returned by in order to receive benefits.
Although the Companies do indicate the specific date that the application must
be returned by on its’ cover letter, it appears to be the better business practice for
the Companies to also indicate the specific date on the Economic Loss
Protection Letter.




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      IX.    SUMMARY OF FINDINGS

Finding #1

The review revealed that the Companies accepted business from and provided
compensation to three (3) producers that had not obtained an appointment, as required.
The Companies are in violation of Sections 10-118(a)(1)(2) and 10-130(a) of the
Insurance Article. (pg 6)

Finding #2

Withdrawn

Finding #3

The review revealed that the Companies, in two (2) instances, declined or nonrenewed
automobile risks that were eligible for rating under the Companies’ filed surcharge plan.
The Companies are in violation of Sections 27-501(a) and 11-341 of the Insurance
Article, and COMAR 31.15.10.06 B. (pg.13)

Finding #4

The review revealed that the Companies inappropriately placed risks in Companies,
which they were ineligible for placement. The Companies are in violation of Section 27-
212(d)(1) of the Insurance Article. (pg. 18)

Finding #5

The review revealed that the Companies assigned rating tiers to policies not designated
in their filings. The Companies are in violation of Sections 27-212(d)(1), 27-501(a)(2)
and 11-341 of the Insurance Article. (pg. 20)

Finding #6

The review revealed that the Companies inappropriately placed risks in incorrect
groups and/or rating tiers. The Companies are in violation of Sections 27-
212(d)(1) and 11-341 of the Insurance Article. (pg. 22)




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Finding #7

The Companies failed to obtain and/or verify necessary information to assure proper
company and tier placement, or to ascertain that insureds were placed in the best
possible tier for which they qualify. The Companies are in violation of Section 11-341 of
the Insurance Article. (pg. 27)

Finding #8

The review revealed that the Companies failed to send the required notice of premium
increase. The Companies are in violation of Section 27-605(c) of the Insurance Article.
(pg. 30)

Finding #9

The review revealed that the Companies failed to pay the appropriate amount for title
and transfer fees in their settlements of total loss claims. The Companies are in
noncompliance with the Insurance Commissioner’s Notice and Order, dated November
25, 1980, and in violation of COMAR 31.15.07.03 B(13). (pg. 35)

Finding #10

The review revealed that the Companies, in one (1) instance, failed to provide the
Certified Collateral Corporation (CCC) Valuation that determines the Actual Cash Value
(ACV) of the total loss claim. Therefore, the examiners were unable to determine if the
“ACV” was properly calculated. (pg. 36)

Finding #11

The review revealed that the Companies failed to make PIP payments within thirty (30)
days of receiving satisfactory proof of claim. The Companies are in violation of Section
19-508(a)(1). (pg. 37)

Finding #12

The review revealed that the Companies failed to pay the simple interest due and/or
document the file stating the reason for the delay on PIP claims paid more than thirty
(30) days after receipt of satisfactory proof of claim. The Companies are in violation of
Section19-508 (c) and COMAR 31.15.07.06. (pg. 39)

Finding #13

The review revealed that the Companies inform the claimant to return the Maryland
Economic Loss Protection Law Cover Letter by a specific date. However, the
Companies do not appropriately complete the form by providing the date. (pg. 41)




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      X. CLOSING

A total of seven hundred (700) files were reviewed. A total of one hundred ninety (190)
individual violations and one (1) general business practice are noted herein.




                     (Section left intentionally blank)




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       XI.    EXAMINATION REPORT SUBMISSION

The courtesy and cooperation extended by the Officers and Employees of the
Companies during the course of the Examination is hereby acknowledged.


Signature on file with original
____________________________________
Dudley B. Ewen, A.I.E., Chief Examiner
Compliance and Enforcement


In addition, the following individuals participated in this examination and in the
preparation of this Report.

Donald Owens
Senior Market Conduct Examiner
Compliance and Enforcement

Kyle Lanasa
Senior Market Conduct Examiner
Compliance and Enforcement

Valerie Turner
Market Conduct Examiner
Compliance and Enforcement

Andre’ Ham
Market Conduct Examiner
Compliance and Enforcement

Gail Rice
Market Conduct Examiner
Compliance and Enforcement

Dawna E. Ruley
Data Management Specialist
Compliance and Enforcement




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                           EXHIBITS




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Exhibit A

The Companies, in the following, accepted automobile new business from and/or paid
compensation insurance producers that did not have an appointment with the
Companies.

SAMPLE #    POLICY #     EFFECTIVE   COMPANY     PRODUCER NAME   DATE PRODUCER    PRODUCER CODE
                           DATE                                    APPOINTED          (SOB)
   24       1L327600      11/09/02     GE      TAYLOR,STACEY L    NOT APPOINTED        32876
   16       4003280791    05/24/03     GC      FORTUNE,LISA G        08/07/03         32620
   14        NP11940      05/01/03     GC      SISSON,TRACY L        08/07/03         33605
COUNT: 3




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Exhibit B

Automobile “Declinations”

GEICO General Insurance Company, on the following, declined a risk that is eligible for
rating under the Companies’ filed surcharge plan.

 SAMPLE #   POLICY #     DATE OF                              CANCELLATION REASONS
                       CANCELLATION
     25     1m331333      12/13/02    …The specific reason (s) for our action is: Your violation on 3/28/00. The
                                      Companies subsequently indicated in a response to our query, that the
                                      violation was for a ticket for 20 miles over the speed limit.
Count: 1




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Exhibit C

Automobile “Nonrenewal” Cancellations

Government Employees Insurance Company, on the following, nonrenewed a
policyholder that is eligible for rating under the Companies’ filed surcharge plan.

SAMPLE #     POLICY #        DATE OF                        CANCELLATION REASONS
                           CANCELLATION
   12       22444590 and      03/24/03  …GEICO’S UNDERWRITING STANDARDS DO NOT ALLOW THE
              22444592                  CONTINUATION OF ANY DRIVER CONVICTED OF EXCEEDING MAXIMUM
                                        SPEED LIMIT BY 30 MPH…
Count: 1




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Exhibit D

Automobile Premium Increase Initiated by Company

The Companies, in the following, inappropriately placed risks in Companies that they
were ineligible for placement.
SAMPLE #    POLICY #   EFFECTIVE DATE    COMPANY      CORRECT       REASON FOR INCORRECT PLACEMENT
                                        PLACEMENT    PLACEMENT
   52       49062840       7/6/03       GEICO GEN      GEICO        COMPANY AGREED THAT SINCE PH WAS
                                                                    A TEACHER AND GOVERNMENT
                                                                    EMPLOYEE, PLACEMENT SHOULD HAVE
                                                                    BEEN IN GEICO
   53       1G647880       2/7/03       GEICO GEN      GEICO        COMPANY AGREED THAT SINCE PH WAS
                                                                    A TEACHER AND GOVERNMENT
                                                                    EMPLOYEE, PLACEMENT SHOULD HAVE
                                                                    BEEN IN GEICO
   54       47945900       4/10/03      GEICO GEN      GEICO        SINCE PH WAS A TEACHER AND
                                                                    GOVERNMENT EMPLOYEE, PLACEMENT
                                                                    SHOULD HAVE BEEN IN GEICO
   66       23501290       7/4/03         GEICO     GEICO GENERAL   PH IS NEITHER MILITARY NOR
                                                                    GOVERNMENT EMPLOYEE, SO
                                                                    PLACEMENT SHOULD HAVE BEEN IN
                                                                    GEICO GENERAL
   68       38406310       6/19/03        GEICO     GEICO GENERAL   COMPANY AGREED PH IS NEITHER
                                                                    GOVERNMENT NOR MILITARY SO
                                                                    PLACEMENT SHOULD HAVE BEEN IN
                                                                    GEICO GENERAL
   73       27145400       6/20/03        GEICO     GEICO GENERAL   PH IS NON-GOVERNMENT RETIREE, SO
                                                                    PLACEMENT SHOULD HAVE BEEN IN
                                                                    GEICO GENERAL
   75       53314440       4/8/03         GEICO     GEICO GENERAL   COMPANY AGREED THAT AS A NON-
                                                                    GOVERNMENT RISK, PLACEMENT
                                                                    SHOULD HAVE BEEN IN GEICO GENERAL
   81       20830630       3/3/03         GEICO     GEICO GENERAL   COMPANY AGREED THAT AS A NON-
                                                                    GOVERNMENT RISK, PLACEMENT
                                                                    SHOULD HAVE BEEN IN GEICO GENERAL
 TOTAL: 8




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Exhibit E

Automobile Renewals

The Companies, in the following, inappropriately placed a risk in a company in which it
was ineligible for placement.
SAMPLE #    POLICY #     EFFECTIVE    COMPANY     CORRECT     REASON FOR INCORRECT PLACEMENT
                           DATE      PLACEMENT   PLACEMENT
   97       2001426341    08/12/03   GEICO GEN     GEICO     PH IS FEDERAL EMPLOYEE SO PLACEMENT
                                                             SHOULD BE IN GEICO
 TOTAL: 1




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Exhibit F

Automobile Premium Increase Initiated by Company

Companies, in the following, inappropriately assigned a rating tier that is not designated
in their rate flings.

SAMPLE #    POLICY #   EFFECTIVE DATE    COMPANY      INAPPROPRIATE TIER   APPROPRIATE TIER
    4       U043840        6/16/03      GEICO CAS           TIER 0                *
    6       Y846230        3/23/03       GEICO IND          TIER 0                *
    9       LY86780        6/12/03      GEICO INDEM         TIER 0                *
   23       39478180       3/10/03      GEICO GEN           TIER 0                *
   60       22520140       5/18/03        GEICO             TIER 0                *
 TOTAL: 5


Companies are to determine appropriate tier.




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Exhibit G

Automobile Renewals

The Companies, in the following, inappropriately assigned a rating tier that is not
designated in their rate flings.
SAMPLE #    POLICY #     EFFECTIVE DATE   COMPANY     INAPPROPRIATE TIER   APPROPRIATE TIER
    9        6244487         10/2/02       GEICO            TIER 0                *
   13        6075176        10/13/02       GEICO            TIER 0                *
   35        2768751         4/10/03       GEICO            TIER 0                *
   81        V316080        12/27/02      GEICO IND         TIER 0                *
   85       386659908        7/21/03      GEICO GEN         TIER 0                *
   93       1759296203       7/12/03      GEICO IND         TIER 0                *
 TOTAL: 6


Companies are to determine appropriate tier.




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Exhibit H

Automobile New Business

The Companies inappropriately placed risks in incorrect groups and/or rating tiers.

SAMPLE POLICY # EFFECTIVE COMPANY COMPANY APPROPRIATE REASON FOR INCORRECT PLACEMENT
   #                DATE         PLACEMENT PLACEMENT
   3     MG28640   10/6/02 GEICO  GROUP 5      *      THE JOB DESCRIPTION ON THE
                            CAS                       APPLICATION IS NOT SPECIFIC ENOUGH
                                                      TO DETERMINE IF THE PH IS ACTUALLY
                                                      AN ENTERTAINER, WHICH WOULD BE
                                                      GROUP 5, OR SOMEONE WHO WORKS IN
                                                      AN OFFICE ENVIRONMENT, WHICH
                                                      COULD BE A GROUP 3 OR 4.
  10     NP28450  1/30/03  GEICO  GROUP 9   GROUP 5   GROUP 9 IS FOR RETIRED MILITARY,
                            CAS                       RETIRED POSTAL, AND RETIRED
                                                      FEDERAL EMPLOYEES. ALL OTHERS ARE
                                                      TO BE CLASSIFIED PER PRE-
                                                      RETIREMENT OCCUPATION
  31     1N549500  2/15/03 GEICO  GROUP 1   GROUP 2   SPECIFIC JOB IS STATISTICIAN WITH
                                                      GROUP 2 PLACEMENT
  33     1Q848040  4/14/03 GEICO  GROUP 9   GROUP 4   NON-FEDERAL AND MILITARY RETIREES
                                                      ARE TO BE ASSIGNED TO GROUPS
                                                      BASED ON PRE-RETIREMENT
                                                      OCCUPATIONS
  63     1N280950  2/20/03 GEICO  GROUP 9   GROUP 4   NON-GOVERNMENT RETIREE IS PLACED
                            GEN                       IN PRE-RETIREMENT OCCUPATION
                                                      GROUP
  46     1L667300 10/25/02 GEICO  GROUP 3   GROUP 4   MECHANICS HAVE A SPECIFIC JOB
                            GEN                       CLASS AND ARE CONSIDERED AS GROUP
                                                      4
  53     1N517040 12/20/02 GEICO  GROUP 9   GROUP 4   NON-GOVERNMENT EMPLOYEES ARE
                            GEN                       CLASSIFIED BY PRE-RETIREMENT
                                                      OCCUPATION
  54     1K174500  1/3/03  GEICO  GROUP 9   GROUP 3   NON-GOVER NMENT EMPLOYEES ARE
                            GEN                       CLASSIFIED BY PRE-RETIREMENT
                                                      OCCUPATION. IN THIS CASE THAT
                                                      WOULD BE SALES MANAGER, GROUP 3
TOTAL: 8


* Companies are to determine appropriate placement.




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Exhibit I

Automobile Premium Increase Initiated by Company

The Companies inappropriately placed risks in incorrect groups and/or rating tiers, on
the following.

SAMPLE # POLICY # EFFECTIVE COMPANY COMPANY        APPROPRIATE REASON FOR INCORRECT PLACEMENT
                     DATE           PLACEMENT       PLACEMENT
   4     U043840    6/16/03  GEICO   GROUP 5         GROUP 1   APP SHOWS INSURED AS GRAPHIC
                              CAS                              ARTIST WITH BFA - ASSIGNED TO
                                                               UNSKILLED LABOR CLASS
   22       12506180   2/15/03   GEICO   GROUP 9     GROUP 1   GROUP 9 FOR MILITARY OR FEDERAL
                                  GEN                          RETIREES. ALL OTHERS ARE TO BE
                                                               CLASSIFIED B Y PRIOR EMPLOYMENT
   27       30517250   5/25/03   GEICO   GROUP 2     GROUP 1   THERE IS A SPECIFIC CLASS FOR
                                  GEN                          TEACHER & PLACEMENT IS GROUP 1
   29       49095280   3/12/03   GEICO   GROUP 9     GROUP 4   RETIRED NON-GOVERNMENT ARE TO
                                  GEN                          BE CLASSIFIED PER PRE-RETIREMENT
                                                               OCCUPATION, OR GROUP 4 IF
                                                               OCCUPATION UNKNOWN
   30       12631280   4/3/03    GEICO   GROUP 3     GROUP 4   CAR SALESMAN ARE GROUP 4 PER
                                  GEN                          OCCUPATION LIST
   33       25798310   4/10/03   GEICO   GROUP 9     GROUP 4   GROUP 9 IS FOR MILITARY & FEDERAL
                                  GEN                          RETIREES. COMPANY HAS NO
                                                               AVAILABLE INFO TO DETERMINE
                                                               POLICYHOLDER'S PRE-RETIREMENT
                                                               OCCUPATION SO GROUP 4 IS THE
                                                               APPROPRIATE PLACEMENT
   35       1Q147370   8/4/03    GEICO   GROUP 1      GROUP2   INSURED IS HOMEMAKER, SO
                                  GEN                          SPOUSE'S OCCUPATION OF "SECRET
                                                               SERVICE" WOULD BE USED FOR
                                                               PLACEMENT. ACCORDING TO THE
                                                               OCCUPATION LIST, A SECRET SERVICE
                                                               AGENT IS A GROUP 2 CLASSIFICATION.
                                                               THERE IS NO DOCUMENTATION TO
                                                               SUPPORT GROUP 1 PLACEMENT AS A
                                                               "FEDERAL EMPLOYEE GROUP 1, GS10
                                                               & BELOW"
   38       58800410   2/26/03   GEICO   GROUP 4         *     INSURED LISTED OCCUPATION AS
                                  GEN                          MANAGER - NO SPECIFICS ON WHAT
                                                               KIND OF MANAGER PH IS. SINCE
                                                               THERE ARE MANAGER
                                                               CLASSIFICATIONS IN GROUPS 1-4,
                                                               WITH NO AVAILABLE INFO, IT IS NOT
                                                               POSSIBLE TO VERIFY THAT GROUP 4 IS
                                                               THE APPROPRIATE CLASSIFICATION
   47       1B410580   6/4/03    GEICO   GROUP 1     GROUP 4   INSURED DESCRIBED HIS JOB AS
                                  GEN                          MACHINE OPERATOR, WHICH IS A
                                                               GROUP 4 PLACEMENT
   48       77676590   4/29/03   GEICO   GROUP 3         *     THE PLACEMENT MAY OR MAY NOT BE
                                  GEN                          CORRECT- THE SYSTEM AT THE TIME
                                                               PH WAS WRITTEN WAS NOT AS
                                                               SOPHISTICATED AS CURRENT SO
                                                               WHILE TODAY'S STANDARDS MIGHT
                                                               MAKE PH ELIGIBLE FOR GROUP 1, 7
                                                               YRS AGO GROUP 3 WAS THE OPTION
                                                               AVAILABLE.
   49       77673600   4/12/03   GEICO   GROUP 4     GROUP 1   THIS INSURED IS A TEACHER, WHICH
                                  GEN                          IS A GROUP 1 CLASSIFICATION
   51       61977780   6/22/03   GEICO   GROUP 2     GROUP 1   PH IS TEACHER, SPOUSE IS
                                  GEN                          ATTORNEY. BOTH ARE GROUP 1 JOBS.




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SAMPLE # POLICY # EFFECTIVE COMPANY COMPANY        APPROPRIATE REASON FOR INCORRECT PLACEMENT
                     DATE           PLACEMENT       PLACEMENT
   62    91006230   4/15/03  GEICO   GROUP 2            *      NO SPECIFIC INFORMATION WAS
                                                               AVAILABLE TO DETERMINE WHAT THE
                                                               ACTUAL EMPLOYMENT WAS OR TO
                                                               DETERMINE IF GROUP 2 IS CORRECT
                                                               PLACEMENT
   67       1G603310   2/11/03   GEICO   GROUP 1        *      WITH NO INFORMATION TO VERIFY
                                                               INSURED'S ACTUAL JOB, IT IS NOT
                                                               POSSIBLE TO VERIFY ACTUAL JOB
                                                               CLASS OR GROUP PLACEMENT
   69       1G255320   3/11/03   GEICO   GROUP 2        *      NEED SPECIFIC OCCUPATION TO
                                                               PROPERLY CLASSIFY RISK'S
                                                               OCCUPATION
   73       27145400   6/20/03   GEICO   GROUP 9     GROUP 4   RETIRED NON-
                                                               GOVERNMENTINSUREDS ARE TO BE
                                                               PLACED PER PRIOR OCCUPATION OR
                                                               IF UNKNOWN, GROUP 4
   74       73660430   6/19/03   GEICO   GROUP 7     GROUP 1   THE INSURED SHOWED ENGINEER AS
                                                               HIS EMPLOYMENT ON HIS ORIGINAL
                                                               APPLICATION APPLICATION
   75       53314440   4/8/03    GEICO   GROUP 3     GROUP 1   PER CO RESPONSE TO QUERY, PH IS
                                                               OPERATIONS MANAGER, A GROUP 1
                                                               PLACEMENT
   78       53890500   4/29/03   GEICO   GROUP 3     GROUP 4   THE LATEST QUESTIONNAIRE IN FILE
                                                               STATES JOB AS SALES ASSOCIATE, A
                                                               GROUP 4 PLACEMENT ACCORDING TO
                                                               THE EMPLOYMENT CLASSIFICATION
                                                               LIST
   79       91008570   3/27/03   GEICO   GROUP 3        *      INSURED LISTED JOB AS COMPUTER
                                                               CONSULTANT, WHICH IS EITHER A
                                                               GROUP 2 OR GROUP 3 DEPENDING ON
                                                               SPECIFIC DESCRIPTION
   81       20830630   3/3/03    GEICO   GROUP 2     GROUP 1   SPOUSE IS PUBLISHER WHICH IS A
                                                               GROUP 1
   83       39669640   8/4/03    GEICO   GROUP 5        *      THERE ARE A NUMBER OF INSPECTOR
                                                               CATEGORIES WITH GROUP 2-5
                                                               PLACEMENT. NO INFO TO SHOW WHY
                                                               THIS WARRANTED PLACEMENT IN
                                                               GROUP 5. EVEN IF 5 IS CORRECT, JOB
                                                               CLASSIFICATION SHOULD BE
                                                               INSPECTOR-NON SKILLED
   84       31721680   6/8/03    GEICO   GROUP 2     GROUP 8   ENLISTED MILITARY ARE CODED IN
                                                               GROUP 8
   95       1M317860   4/30/03   GEICO   GROUP 3     GROUP 2   INSURED'S OCCUPATION DESCRIBED
                                                               BY SALES CONSULTANT AS
                                                               PROGRAMMER, WHICH IS A GROUP 2
                                                               PLACEMENT ACCORDING TO
                                                               COMPANY OCCUPATION LIST
TOTAL: 24


* The Companies are to determine appropriate placement.




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Exhibit J

Automobile Renewals

The Companies inappropriately placed risks in incorrect groups and/or rating tiers, on
the following.

SAMPLE   POLICY #     EFFECTIVE COMPANY    COMPANY    APPROPRIATE       REASON FOR INCORRECT
   #                     DATE             PLACEMENT    PLACEMENT              PLACEMENT
   4        3176728     9/12/02  GEICO     GROUP 9      GROUP 4   INSURED WAS NOT FEDERAL OR
                                                                  MILITARY, THEREFORE GROUP 9
                                                                  WOULD NOT APPLY. BASED ON JOB AS
                                                                  A DISPATCHER, GROUP 4 WOULD BE
                                                                  CORRECT PLACEMENT AND
                                                                  "DISPATCHER" THE CORRECT
                                                                  OCCUPATION CODE
   5        9316643    9/17/02    GEICO    GROUP 3         *      NEED TO KNOW INSURED'S ACTUAL
                                                                  OCCUPATION IN ORDER TO ASSIGN A
                                                                  CLASSIFICATION CODE
   8        2507325    10/1/02    GEICO    GROUP 2      GROUP 1   WITH LAST AVAILABLE
                                                                  QUESTIONNAIRE ON RECORD, CLASS
                                                                  SHOULD HAVE BEEN PSYCHOLOGIST
   10       7128475    10/5/02    GEICO    GROUP 1      GROUP 9   RETIRED FROM MILITARY SO GROUP 9
                                                                  WOULD BE THE APPLICABLE JOB
                                                                  CLASSIFICATION. EVEN IF NOT
                                                                  RETIRED, MILITARY E5 STATUS WOULD
                                                                  HAVE WARRANTED GROUP 8
                                                                  PLACEMENT, NOT GROUP 1
   11       5220645    10/10/02   GEICO    GROUP 5      GROUP 3   OCCUPATIONAL THERAPIST IS A
                                                                  SPECIFIC JOB CLASS WITH GROUP 3
                                                                  PLACEMENT
   14       6526457    10/19/02   GEICO    GROUP 2      GROUP 1   ADMINISTRATOR -GROUP I
                                                                  ACCORDING TO EMPLOYMENT LIST
   15       2049440    10/30/02   GEICO    GROUP 9      GROUP 1   RETIRED PH WAS NEITHER MILITARY
                                                                  OR FEDERAL EMPLOYEE AND SHOULD
                                                                  BE CLASSIFIED BY PRE-RETIREMENT
                                                                  OCCUPATION WHICH WAS SCHOOL
                                                                  ADMINISTRATOR
   20       2769196    11/24/02   GEICO    GROUP 5      GROUP 1   PH IS TEACHER, WHICH IS A GROUP 1
                                                                  PLACEMENT
   23       4189221    12/6/02    GEICO    GROUP 3         *      PER COMPANY'S RESPONSE TO
                                                                  QUERY, PH IS "MANAGER, DEPT OF
                                                                  HUMAN RESOURCES." THERE IS A
                                                                  SPECIFIC CLASSIFICATION FOR
                                                                  HUMAN RESOURCES MANAGER WITH
                                                                  GROUP 1 PLACEMENT
   24       2034593    12/11/02   GEICO    GROUP 9         *      IF NON-GOVERNMENT RETIREE, JOB
                                                                  CLASSIFICATION SHOULD BE PER
                                                                  FORMER OCCUPATION, OR IF
                                                                  UNKNOWN, GROUP 4
   26       7877910    12/25/02   GEICO    GROUP 1      GROUP 2   APPLICABLE COMPUTER EMPLOYMENT
                                                                  CATEGOR1ES ARE GROUP 2
   29       3337443    1/18/03    GEICO    GROUP 9      GROUP 1   INSURED WAS TEACHER BEFORE
                                                                  RETIREMENT AND SHOULD CONTINUE
                                                                  TO BE RATED AS SUCH
   30       1793157    1/28/03    GEICO    GROUP 9      GROUP 3   PH IS RADIOLOGIST, FOR WHICH
                                                                  THERE IS A CLASS. MILITARY CCLASS
                                                                  FOR HUSBAND NOT VALID AS HE DIED
                                                                  IN 1992.
   31       2128725     2/9/03    GEICO    GROUP 1         *      SPECIFIC OCCUPATION
                                                                  CLASSIFICATION NEEDED TO REPLACE
                                                                  GROUP DESCRIPTION. WITHOUT
                                                                  DOCUMENTATION IT IS NOT POSSIBLE
                                                                  TO ASCERTAIN IF GROUP 1 IS
                                                                  CORRECT PLACEMENT




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SAMPLE   POLICY #    EFFECTIVE COMPANY        COMPANY    APPROPRIATE REASON FOR INCORRECT PLACEMENT
   #                    DATE                 PLACEMENT    PLACEMENT
  43     1B43881       6/19/03  GEICO         GROUP 1      GROUP 2   THERE IS A SPECIFIC JOB CLASS FOR
                                                                     BROADCASTER - IN GROUP 2
  48      2452635     9/26/02     GEICO       GROUP 3         *      MANAGERS CAN GO FROM GROUP 1
                                   GEN                               TO 4 - NO SPECIFIC INFO ON TYPE OF
                                                                     MANAGEMENT JOB TO SUPPORT THE
                                                                     USE OF GROUP 3
  49      6734901     10/1/02     GEICO       GROUP 3      GROUP 5   SPECIFIC CLASSES EXIST FOR BOTH
                                   GEN                               OCCUPATIONS (BARTENDER AND
                                                                     FIREFIGHTER) & BOTH ARE GROUP 5
  51      7625873     10/7/02     GEICO       GROUP 2         *      THE CORRECT CLASSIFICATION FOR
                                   GEN                               THIS RISK IS INSPECTOR. HOWEVER,
                                                                     PLACEMENT COULD BE IN GROUP 2, 4,
                                                                     OR 5 DEPENDING ON EXACT NATURE
                                                                     OF WORK. FILE INFORMATION
                                                                     PROVIDES NO DETAIL ON EXACTLY
                                                                     WHAT INSURED DOES SO IT IS NOT
                                                                     POSSIBLE TO DETERMINE IF GROUP 2
                                                                     IS CORRECT PLACEMENT
  57      7627058     11/14/02    GEICO       GROUP 9      GROUP 4   RETIRED NON-GOVERNMENT RISKS
                                   GEN                               ARE CLASSIFIED BY PRE-RETIREMENT
                                                                     OCCUPATION OR IN GROUP 4 IF
                                                                     UNKNOWN
  58      2765475     11/22/02    GEICO        TIER 7         *      THE INFO USED FOR GROUP
                                   GEN                               PLACEMENT IS 4 YRS OLD AND IT IS
                                                                     POSSIBLE THAT THIS GRADUATE
                                                                     STUDENT HAS GONE INTO A
                                                                     PROFESSIONAL CAREER THAT WOULD
                                                                     WARRANT PLACEMENT IN A MORE
                                                                     ADVANTAGEOUS GROUP.
  60      5947361     11/26/02    GEICO       GROUP 9      GROUP 4   NON-GOVERNMENT RETIREES ARE
                                   GEN                               CLASSIFIED BY THEIR PRE-
                                                                     RETIREMENT OCCUPATION, OR
                                                                     GROUP 4 IF PRIOR IS UNKNOWN
  63      7827827     12/8/02     GEICO       GROUP 4      GROUP 2   INSURED'S SPOUSE IS A DOCTOR AND
                                   GEN                               THERE ARE TWO CARS ON THE POLICY
                                                                     SO SPOUSE'S JOB, A GROUP 2
                                                                     PLACEMENT, WOULD BE CORRECT
  64      7400029     12/13/02    GEICO       GROUP 2         *      SALES/MARKETING REPRESENTS A
                                   GEN                               GROUP OF SEPARATE OCCUPATIONS.
                                                                     A SPECIFIC JOB CLASS SHOULD HAVE
                                                                     BEEN USED TO DEFINE OCCUPATION
  65      4186096     12/28/02    GEICO       GROUP 2      GROUP 4   PH IS CUSTOMER SERVICE REP, AS
                                   GEN                               INDICATED IN PLOG NOTES
  70      6674670     3/24/03     GEICO       GROUP 7      GROUP 1   PH WAS A STUDENT IN 1992 BUT MUST
                                   GEN                               HAVE A SPECIFIC JOB NOW DUE TO
                                                                     ASSOC WITH AMERICAN COUNSELING
                                                                     ASSOCIATION
  80      3344662     6/30/03     GEICO       GROUP 7      GROUP 1   INSURED IS A TEACHER NOW, NOT A
                                   GEN                               STUDENT
  83     UW44690      4/21/03    GEICO IND    GROUP 9      GROUP 1   RETIRED NON-GOVERNMENT PH
                                                                     SHOULD BE CLASSIFIED PER PRE-
                                                                     RETIREMENT JOB, WHICH WAS
                                                                     ECONOMIST
  85     386659908    7/21/03     GEICO       GROUP 4         *      A SPECIFIC JOB CLASSIFICATION
                                   GEN                               SHOULD HAVE BEEN DETERMINED
                                                                     WHEN THIS RISK WAS TRANSFERRED
                                                                     FROM DC TO MD
  88     665325205     8/1/03     GEICO       GROUP 3         *      NEED SPECIFIC OCCUPATION
                                   GEN                               DESCRIPTION TO VERIFY
                                                                     CORRECTNESS OF GROUP 3
                                                                     PLACEMENT
  91     469605000     8/6/03     GEICO       GROUP 2      GROUP 1   THERE IS A SPECIFIC JOB
                                                                     CLASSIFICATION FOR LIBRARIAN AND
                                                                     IT IS A GROUP 1 PLACEMENT




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SAMPLE POLICY # EFFECTIVE COMPANY          COMPANY    APPROPRIATE      REASON FOR INCORRECT
   #              DATE                    PLACEMENT    PLACEMENT             PLACEMENT
  92   662699909  8/7/03   GEICO           GROUP 2      GROUP 4   A SELF-EMPLOYED ANTIQUES DEALER
                                                                  WOULD HAVE A GROUP 4 PLACEMENT
  98        200996355   7/19/03   GEICO    GROUP 3      GROUP 1   SCHOOL COUNSELOR IS THE
                0                  GEN                            CORRECT JOB CLASSIFICATION AND
                                                                  GROUP 1 THE CORRECT GROUP
                                                                  PLACEMENT
TOTAL: 32




* The Companies are to determine appropriate placement.




GEICO Draft Report                                                                             63
MARYLAND INSURANCE ADMINISTRATION


Exhibit K

Automobile New Business

The Companies, in the following, wrote a risk without obtaining and/or verifying the
rating variable information required by their underwriting and rate filings.

SAMPLE # POLICY #     EFFECTIVE DATE COMPANY                 LACK OF DOCUMENTATION
    3       MG28640      10/6/02     GEICO     INFORMATION ON THE APPLICATION AND INPUT BY
                                      CAS      COMPANY’S SALES CONSULTANT IS NOT SPECIFIC ENOUGH
                                               TO DETERMINE THAT THE RISK WAS PROPERLY PLACED IN
                                               GROUP 5
 TOTAL: 1




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Exhibit L

Automobile Premium Increase Initiated by Company

The Companies, in the following, renewed risks without obtaining and/or verifying the
rating variable information required by their underwriting and rate filings.

SAMPLE      POLICY #   EFFECTIVE   COMPANY                   LACK OF DOCUMENTATION
   #                      DATE
   3        US15640      6/18/03    GEICO    NO APPLICATION OR OTHER FILE DOCUMENTS WERE AVAILABLE
                                     CAS     TO EXAMINERS TO VERIFY CORRECT EMPLOYMENT CLASS FOR
                                             RATING TIER
   6        Y846230     3/23/03     GEICO    NO RECENT INFO OR DOCUMENTS AVAILABLE TO EXAMINERS TO
                                     IND     VERIFY OR UPDATE CURRENT RISK CHARACTERISTICS THAT
                                             MIGHT QUALIFY RISK FOR BETTER TIER PLACEMENTFOR THIS 9-
                                             YEAR PH
   19       32346120    4/18/03     GEICO    NO CURRENT INFO TO UPDATE RISK CHARACTERISTICS SINCE
                                     GEN     1997 QUESTIONNAIRE. CURRENT INFO MIGHT POTENTIALLY
                                             IMPROVE TIER PLACEMENT FOR THIS 7-YR POLICYHOLDER
   23       39478180    3/10/03     GEICO    PH INSURED FOR 14 YEARS. LAST QUESTIONNAIRE PRESENTED
                                     GEN     IN 1992. IT IS POSSIBLE THAT SINCE THEN SOME RISK
                                             CHARACTERISTICS, SUCH AS BETTER JOB, MIGHT HAVE
                                             CHANGED AND MADE INSURED ELIGIBLE FOR IMPROVED TIER
   24       51887180     6/9/03     GEICO    12-YEAR PH. NO QUESTIONNAIRES, ETC SINCE ORIGINAL
                                     GEN     PLACEMENT. POSSIBLE THAT CHANGES HAVE OCCURRED-SUCH
                                             AS A BETTER JOB CLASS FOR INSURED OR SPOUSE- WHICH
                                             WOULD MAKE THIS RISK ELIGIBLE FOR BETTER TIER PLACEMENT
   25       74055210     7/3/03     GEICO    NO APPLICATION OR OTHER FILE DOCUMENTS TO VERIFY
                                     GEN     CORRECT EMPLOYMENT GROUP FOR RATING TIER OR TO
                                             DETERMINE ANY CHANGES IN RISK CHARACTERISTICS WHICH
                                             MIGHT IMPROVE TIER PLACEMENT FOR THIS 9-YEAR
                                             POLICYHOLDER
   31       39387290    3/15/03     GEICO    NO CURRENT QUESTIONNAIRE SINCE 2000 APP WHICH MIGHT
                                     GEN     SHOW IMPROVED PROFILE FOR BETTER TIER PLACEMENT
   33       25798310    4/10/03     GEICO    NO APPLICATION OR OTHER FILE DOCUMENTS TO VERIFY
                                     GEN     CORRECT EMPLOYMENT CLASS FOR RATING TIER OR TO
                                             UPDATE OTHER RISK CHARACTERISTCS WHICH MIGHT IMPROVE
                                             TIER PLACEMENT FOR THIS 5-YEAR PH
   34       40778340     3/8/03     GEICO    NO UPDATED INFO SINCE 1997 WHICH MIGHT IMPROVE RISK'S
                                     GEN     PROFILE AND MAKE ACCOUNT ELIGIBLE FOR IMPROVED TIER
   37       68380400    4/20/03     GEICO    11-YR PH, WITH LAST QUESTIONNAIRE RECEIVED IN 1997.
                                     GEN     POSSIBLE THAT SINCE THEN SOME RISK CHARACTERISTICS
                                             COULD HAVE IMPROVED AND MADE THE RISK ELIGIBLE FOR
                                             BETTER TIER PLACEMENT
   38       58800410    2/26/03     GEICO    NO APPLICATION OR OTHER FILE DOCUMENTS TO VERIFY
                                     GEN     CORRECT EMPLOYMENT CLASS FOR RATING TIER OR TO
                                             POSSIBLY UPDATE RISK CHARACTERISTICS WHICH MIGHT
                                             IMPROVETHIS 4-YR RISK'S TIER PLACEMENT PROFILE
   39       33556420    4/28/03     GEICO    NO DEFINITIVE INFO ON APP TO PROPERLY DETERMINE
                                     GEN     INSURED'S SPECIFIC OCCUPATION AND THUS, GROUP, FOR
                                             PLACEMENT AND NO UPDATES SINCE 1997 THAT MIGHT IMPROVE
                                             RISK'S PROFILE FOR TIER PLACEMENT
   44       19477480     6/8/03     GEICO    NO QUESTIONNAIRES OR OTHER INFO SINCE 1998. IT IS
                                     GEN     POSSIBLE THAT SINCE RISK CHARACTERISTICS MAY HAVE
                                             IMPROVED ENOUGH TO WARRANT BETTER TIER PLACEMENT
   45       35881530     4/8/03     GEICO    PH INSURED FOR 15 YRS, WITHOUT UPDATED QUESTIONNAIRES
                                     GEN     OR OTHER INFO THAT MIGHT SUGGEST IMPROVED PROFILE AND
                                             BETTER TIER PLACEMENT
   48       77676590    4/29/03     GEICO    NO APPLICATION INFO TO EFFECTIVELY DETERMINE INSURED'S
                                     GEN     JOB CLASS AND NO UPDATES IN 8 YRS. CHANGED RISK
                                             CHARACTERISTICS MIGHT MAKE ACCOUNT ELIGIBLE FOR
                                             IMPROVED TIER PLACEMENT




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SAMPLE      POLICY #   EFFECTIVE   COMPANY                    LACK OF DOCUMENTATION
   #                      DATE
  49        77673600     4/12/03    GEICO    NO QUESTIONNAIRES SINCE 1996 - UPDATED INFO WOULD HAVE
                                     GEN     HELPED POINT OUT INSURED'S MISCLASSIFICATION IN GROUP 4
                                             AND MIGHT HAVE SHOWN ADDITIONAL IMPROVEMENTS IN RISK
                                             CHARACTERISTCS THAT COULD GENERATE BETTER TIER
                                             PLACEMENT
   51       61977780    6/22/03     GEICO    ORIGINAL APP CONTAINED NO EMPLOYMENT INFO AND NO
                                     GEN     UPDATES HAVE BEEN RECEIVED IN 12 YRS SO THE
                                             INNAPPROPRIATE GROUP PLACEMENT DUE TO INCORRECT
                                             EMPLOYMENT CLASSIFICATION WENT UNNOTICED UNTIL QUERY
                                             BROUGHT IT TO ATTENTION. ALSO THERE MAY HAVE BEEN
                                             OTHER CHARACTERISTC CHANGES IN THE PAST 12 YRS WHICH
                                             MIGHT HAVE MADE RISK ELIGIBLE FOR IMPROVED TIER
                                             PLACEMENT
   57       74048060     6/4/03     GEICO    THERE IS NO UPDATED INFO SINCE 1995 THAT WOULD PRESENT
                                             A REVIEW OF THIS 9-YR ACCOUNT FOR POSSIBLE TIER
                                             IMPROVEMENT
   59       76260110    4/10/03     GEICO    NO UPDATED INFO SINCE 1996 FOR THIS PH. POSSIBLE THAT
                                             OCCUPATION OR OTHER CHARACTERISTIC CHANGES MIGHT
                                             HAVE MADE RISK ELIGIBLE FOR IMPROVED TIER PLACEMENT
   62       91006230    4/15/03     GEICO    THERE IS INSUFFICIENT INFO IN FILE TO ASCERTAIN PH'S ACTUAL
                                             JOB. THEREFORE, IT WAS NOT POSSIBLE TO VERIFIY THAT
                                             GROUP 2 PLACEMENT IS CORRECT. PH IS 23-YR POLICYHOLDER -
                                             NO QUESTIONNAIRES TO UPDATE RISK INFO
   63       37417230    5/26/03     GEICO    NO APPLICATION OR OTHER FILE DOCUMENTS TO VERIFY
                                             CORRECT EMPLOYMENT GROUP OR OTHER ATTRIBUTES FOR
                                             RATING TIER IMPROVEMENT. LAST QUESTIONNAIRE RECEIVED IN
                                             1991
   66       23501290     7/4/03     GEICO    NO APPLICATION OR CURRENT FILE DOCUMENTS TO UPDATE
                                             RISK CHARACTERISTICS THAT MIGHT AFFECT TIER PLACEMENT.
                                             INSURED IS AN 18-YEAR POLICYHOLDER
   69       1G255320    3/11/03     GEICO    NO APPLICATION OR OTHER FILE DOCUMENTS TO VERIFY
                                             CORRECT JOB CLASSIFICATION FOR PLACEMENT AND RATING
                                             TIER
   73       27145400    6/20/03     GEICO    NO APPLICATION OR OTHER FILE DOCUMENTS TO VERIFY
                                             CORRECT EMPLOYMENT CLASSIFICATION FOR THIS RETIREE.
                                             RESULT IS GROUP 4 PLACEMENT WHEN ACTUAL OCCUPATION
                                             MIGHT WARRANT BETTER - AND THUS BETTER TIER PLACEMENT
   74       73660430    6/19/03     GEICO    LACK OF UPDATED QUESTIONNAIRES, ETC SINCE POLICY WAS
                                             WRITTEN 9 YEARS AGO CONTRIBUTED TO INSURED'S
                                             CONTINUED PLACEMENT IN WRONG OCCUPATION GROUP
   75       53314440     4/8/03     GEICO    NO APPLICATION OR OTHER FILE DOCUMENTS TO VERIFY
                                             CORRECT EMPLOYMENT CLASSIFICATION FOR RATING TIER.
                                             LAST QUESTIONNAIRE, RECEIVED IN 2000, DID NOT CONTAIN
                                             SPECIFIC ENOUGH INFO TO JUSTIFY GROUP 3 PLACEMENT
   77       25084490    3/21/03     GEICO    THE LAST QUESTIONNAIRE IN FILE WAS DATED IN 1991. THERE IS
                                             NO CURRENT INFORMATION TO VERIFY OR UPDATE INFO FOR
                                             POSSIBLE TIER IMPROVEMENT. 29-YR POLICYHOLDER
   78       53890500    4/29/03     GEICO    THE LATEST QUESTIONNAIRE IN FILE IS DATED FROM 1993.
                                             WITHOUT MORE CURRENT INFO ON INSURED'S
                                             CHARACTERISTICS, IT IS NOT POSSIBLE TO TELL IF INSURED
                                             WOULD BE ELIGIBLE FOR BETTER TIER PLACEMENT. 29-YR
                                             POLICYHOLDER
   79       91008570    3/27/03     GEICO    NO CURRENT FILE DOCUMENTS TO VERIFY CORRECT
                                             EMPLOYMENT GROUP OR OTHER CHARACTERISTICS FOR
                                             POTENTIALRATING TIER IMPROVEMENT. LAST QUESTIONNAIRE
                                             RECEIVED IN 1999 FOR THIS 23 YR PH
   81       20830630     3/3/03     GEICO    LATEST QUESTIONNAIRE DATED IN 1993. IT IS POSSIBLE THAT IN
                                             10 YRS CHANGES IN INSURED'S CHARACTERISTICS MIGHT MAKE
                                             RISK ELIGIBLE FOR IMPROVED TIER
TOTAL: 30




GEICO Draft Report                                                                                   66
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Exhibit M

Automobile Renewals

The Companies, in the following, renewed risks without obtaining and/or verifying the
rating variable information required by their underwriting and rate filings.

SAMPLE # POLICY #     EFFECTIVE DATE   COMPANY                  LACK OF DOCUMENTATION
    5       9316643       9/17/02       GEICO    INSUFFICIENT FILE DOCUMENTATION TO ASCERTAIN
                                                 EXACTLY WHAT INSURED'S OCCUPATION WAS (WHAT TYPE
                                                 OF SALES) AND THEREFORE PRESENTS UNCERTAINTY AS TO
                                                 WHETHER GROUP 3 IS THE APPROPRIATE PLACEMENT FOR
                                                 THIS 22 YR PH
    8       2507325       10/1/02       GEICO    LAST COMPLETED QUESTIONNAIRE IN 1989 FOR THIS 29 YR
                                                 PH THAT HAS BEEN INCORRECTLY ASSIGNED TO GROUP 2.
    9       6244487       10/2/02       GEICO    NO CURRENT FILE DOCUMENTS TO VERIFY LATEST RISK
                                                 FEATURES FOR POSSIBLE RATING TIER IMPROVEMENT.
                                                 LAST QUESTIONNAIRE IN 1997 FOR THIS 12-YR PH
   11       5220645      10/10/02       GEICO    2000 QUESTIONNAIRE SHOWED RISK AS UNEMPLOYED WITH
                                                 A GROUP 5 PLACEMENT. MORE CURRENT DATA MIGHT PUT
                                                 RISK IN BETTER OCCUPATION CLASS AND TIER
   12       6370057      10/11/02       GEICO    NO MORERECENT FILE DOCUMENTS SINCE 1992 APP TO
                                                 VERIFY CURRENT EMPLOYMENT CLASS OR OTHER
                                                 CHARACTERISTICS FOR POSSIBLE RATING TIER
                                                 IMPROVEMENT
   13       6075176      10/13/02       GEICO    LAST QUESTIONNAIRE IN 1993 FOR THIS 13 YR PH SO NO
                                                 WAY TO TELL IF CURRENT PROFILE MIGHT IMPROVE TIER
                                                 PLACEMENT
   16       2078822       11/6/02       GEICO    APPLICATION INFO NOT SUFFICIENTLY DETAILED TO
                                                 PROPERLY DETERMINE OCCUPATION CLASS AND GROUP
                                                 AND NO SUBSEQUENT INFO WAS PROVIDED TO CLARIFY OR
                                                 UPDATE. NO QUESTIONNAIRES HAVE BEEN RECEIVED SINCE
                                                 ACCOUNT WAS WRITTEN 19 YRS AGO.
   17       3047176      11/12/02       GEICO    NO APPLICATION OR CURRENT OTHER FILE DOCUMENTS TO
                                                 VERIFY CORRECT EMPLOYMENT GROUP FOR RATING TIER
   18       1394108      11/20/02       GEICO    NO QUESTIONNAIRES OR OTHER DOCUMENTS SINCE 1992
                                                 APP. NO WAY TO TELL IF CHANGED RISK CHARACTERISTICS
                                                 MIGHT MAKE PH ELIGIBLE FOR BETTER TIER. 14-YR PH.
   19       7674565      11/23/02       GEICO    NO UPDATED INFORMATION SINCE 1996 FOR THIS 8-YR PH. IT
                                                 IS POSSIBLE CHANGES IN RISK CHARACTERISTICS MIGHT
                                                 MAKE INSURED ELIGIBLE FOR TIER IMPROVEMENT
   22       9590678       12/1/02       GEICO    THIS IS A 20-YR PH. LAST REFERENCE TO EMPLOYMENT
                                                 STATUS WAS IN 1992. IT IS POSSIBLE THAT CHANGES IN
                                                 OCCUPATION OR OTHER RISK CHARACTERISTICS MIGHT
                                                 HAVE PUT RISK IN POSITION FOR TIER IMPROVEMENT
   26       7877910      12/25/02       GEICO    LAST QUESTIONNAIRE DONE IN 1996 FOR THIS 8-YR
                                                 POLICYHOLDER. IT IS POSSIBLE THAT MORE CURRENT
                                                 INFORMATION WOULD PROVIDE REASON TO IMPROVE TIER
                                                 PLACEMENT
   29       3337443       1/18/03       GEICO    LAST INFORMATION PROVIDED IN 1997 FOR THIS 7-YR PH. IT
                                                 IS POSSIBLE THAT MORE CURRENT INFORMATION ON RISK
                                                 CHARACTERISTICS MIGHT PRESENT A CASE FOR TIER
                                                 BETTERMENT
   30       1793157       1/28/03       GEICO    LAST QUESTIONNAIRE IN 1992 SHOWED HUSBAND AS
                                                 DECEASED. WITH NO MORE CURRENT INFO OR
                                                 QUESTIONNAIRES, POLICY HAS BEEN CODED WITH THE
                                                 DECEASED HUSBAND'S OCC RATHER THAN THE CURRENT
                                                 INSURED'S. IT IS POSSIBLE THAT CORRECT CLASS AND
                                                 UPDATED INFO ON OTHER RISK CHARACTERISTICS MIGHT
                                                 HAVE MADE RISK ELIGIBLE FOR IMPROVED TIER PLACEMENT

   31       2128725       2/9/03        GEICO    NO APPLICATION OR OTHER FILE DOCUMENTS TO VERIFY
                                                 CORRECT EMPLOYMENT CLASS FOR FOR RATING TIER AND
                                                 NO MORE CURRENT DOCUMENTATION THAN THE APP 5 YRS
                                                 AGO TO REVIEW FOR POSSIBLE TIER IMPROVEMENT



GEICO Draft Report                                                                                  67
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SAMPLE # POLICY #   EFFECTIVE DATE   COMPANY                   LACK OF DOCUMENTATION
   34     2147493       3/25/03       GEICO      30-YR POLICYHOLDER WITH NO UPDATED INFORMATION
                                                 WHICH MIGHT BENEFIT RISK IN TERMS OF TIER PLACEMENT
   35     2768751       4/10/03       GEICO      NO QUESTIONNAIRES OR OTHER FILE INFO WHICH COULD
                                                 UPDATE RISK CHARACTERISTICS FOR POSSIBLE TIER
                                                 BETTERMENT
   37     7295683       4/11/03       GEICO      10 YR PH. COULD NOT LOCATE ANY QUESTIONNAIRES OR
                                                 UPDATED INFO THAT MIGHT PRESENT A REASON FOR
                                                 BETTER TIER PLACEMENT
   47     1158818       9/26/02      GEICO GEN   LAST UPDATED INFO IN FILE FOR THIS 15-YR PH WAS INPUT
                                                 IN 1998. MORE CURRENT DATA MIGHT SHOW CHANGED RISK
                                                 CHARACTERISTICS THAT WOULD LEAD TO TIER
                                                 IMPROVEMENT
   48     2452635       9/26/02      GEICO GEN   LAST UPDATED INFORMATION WAS IN 1997. UPDATED
                                                 INFORMATION ON RISK CHARACTERISTICS MIGHT PRESENT
                                                 A CASE FOR TIER IMPROVEMENT
   50     4185056       10/4/02      GEICO GEN   1997 JURY INFO AND 2001 QUESTIONNAIRE ARE ONLY
                                                 AVAILABLE DOCUMENTS TO INDICATE JOB CLASSIFICATION
                                                 AND NEITHER SUGGESTS ANY MILITARY AFFILIATION, SO JOB
                                                 CLASS CANNOT BE VERIFIED AS CORRECT
   51     7625873       10/7/02      GEICO GEN   THE FILE DOES NOT CONTAIN ADEQUATE SPECIFIC
                                                 INFORMATION REGARDING INSURED'S JOB SO CORRECT
                                                 GROUP COULD BE VERIFIED FROM THE 3 AVAILABLE
                                                 CLASSES OF "INSPECTOR."
   55     3270091       11/1/02      GEICO GEN   DOCUMENTATION IN FILE DOES NOT ADEQUATELY SUPPORT
                                                 THE JOB CLASSIFICATION AND EMPLOYMENT GROUP
                                                 ASSIGNED
   58     2765475      11/22/02      GEICO GEN   NO FILE DOCUMENTATION TO SUPPORT RISK'S BEING
                                                 CLASSIFIED AS A STUDENT SINCE 1999. IN RESPONSE TO
                                                 QUERY CO STATED THAT UNLESS INSURED NOTIFIES THEM
                                                 TO A NEW OCCUPATION, THE SAME ONE WILL BE USED UNTIL
                                                 SOME ADDITIONAL INFO IS PRESENTED. PARTICULARLY IN
                                                 THE CASE OF "STUDENT" SITUATIONS, A MORE PROACTIVE
                                                 APPROACH TO UPDATING INFO WOULD BE WARRANTED SO
                                                 RISK CAN BE EVALUATED FOR TIER IMPROVEMENT
   63     7827827       12/8/02      GEICO GEN   8 YR PH WITH NO CURRENT INFO OR DOCUMENTATION
                                                 WHICH MIGHT UPDATE INFO AND LEAD TO BETTER TIER
                                                 PLACEMENT
   64     7400029      12/13/02      GEICO GEN   SALES AND MARKETING JOBS APPEAR IN SEVERAL
                                                 OCCUPATION GROUPS. WITHOUT CURRENT INFORMATION,
                                                 THERE IS NO WAY TO VERIFY OR SUPPORT GROUP 2
                                                 PLACEMENT. ALSO WITHOUT UPDATED INFO VIA
                                                 QUESTIONNAIRE, ETC, IT IS POSSIBLE THERE IS MISSED
                                                 OPPORTUNITY TO IMPROVE TIER PLACEMENT
   70     6674670       3/24/03      GEICO GEN   THERE HAS BEEN NO UPDATED DOCUMENTATION OR
                                                 INFORMATION THAT WOULD HAVE ALERTED THE COMPANY
                                                 TO PH'S CHANGED EMPLOYMENT STATUS SINCE 1992 ANDTO
                                                 POSSIBLY IMPROVE TIER PLACEMENT
   72     4098713       4/12/03      GEICO GEN   THERE ARE NO UPDATED QUESTIONNAIRES OR OTHER INFO
                                                 TO VERIFY OR UPDATE THE CURRENT EMPLOYMENT STATUS
                                                 AND OTHER CHARACTERISTICS THAT MIGHT MAKE THE RISK
                                                 ELIGIBLE FOR BETTER TIER PLACEMENT
   75    3046545`       4/18/03      GEICO GEN   POLICYHOLDER HAS BEEN INSURED WITH THE COMPANY
                                                 FOR FOURTEEN (14) AND THE CURRENT RENEWAL INCLUDES
                                                 A GOOD DRIVER RENEWAL DISCOUNT FOR BEING ACCIDENT
                                                 AND VIOLATION FREE, INDICATING THE RISK SHOULD BE IN A
                                                 MORE FAVORABLE TIER.
   81     V316080      12/27/02      GEICO IND   LAST QUESTIONNAIRE IN FILE IS DATED IN 1999. IT IS
                                                 POSSIBLE THAT INSURED'S OCCUPATION OR OTHER RISK
                                                 CHARACTERISTICS HAVE CHANGED BUT THERE IS NO
                                                 CURRENT INFORMATION WITH WHICH TO VERIFY OR UPDATE
                                                 THIS 7-YR PH
   30




GEICO Draft Report                                                                                  68
MARYLAND INSURANCE ADMINISTRATION


Exhibit N

       Automobile “Total Loss” Claims

The Companies failed to pay the appropriate amount for title and transfer fees in its
settlements of total losses, for the following claimants.

 SAMPLE #         CLAIM #        COMPANY        DATE OF LOSS   AMOUNT UNPAID
     7        0004456890101132     GE              09/04/02        $33
    15        0011600630101123     GE              10/05/02        $33
    48        0138090680101058     GE              11/13/02        $33
    60        0064076840101144     GG              10/10/02         $5
    61        0066233160101034     GG              02/02/03        $10
    65        0085127530101079     GG              02/26/03        $33
    74        0105067200101064     GG              10/09/02         $5
    77        0110834240101070     GG              12/27/02        $33
    80        0129532040101028     GG              09/07/02         $5
    84       01558515600101049     GG              04/30/03        $10
 COUNT: 10




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MARYLAND INSURANCE ADMINISTRATION


Exhibit O

Automobile “Total Loss” Claims

The Companies failed to provide the total loss documentation to substantiate if the
correct settlement value was determined for the following claim.

   SAMPLE #       CLAIM #        COMPANY      DATE OF LOSS
      8        006681900101198     GE            04/07/03
   COUNT: 1




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MARYLAND INSURANCE ADMINISTRATION


Exhibit P

Automobile “PIP Only” Claims

The Companies failed to make payment of PIP medical bills within thirty (30) days of
receiving satisfactory proof of claim for the following claims.

SAMPLE #        CLAIM#       DATE OF   DATE MEDICAL  DATE    BILLED AMOUNT   # OF DAYS   COMPANY
                              LOSS       BILLS OR   MEDICAL                MEDICAL BILLS
                                      DOCUMENTATION BILLS                  OUTSTANDING *
                                         RECEIVED    PAID
   10       0069905010101085 02/23/03     04/29/03  10/17/03     $209.78        141        GE
   16       0156799610101031 11/25/02   01/28/03   08/21/03     $120.00        175         GE
                                        02/17/03   04/22/03     $779.11         34
                                        02/17/03   04/22/03     $210.48         34
                                        02/17/03   04/22/03      $82.50         34
                                        02/28/03   04/22/03      $90.00         23
   19       0134518320101066 01/30/03   03/12/03   04/24/03     $250.00         13         GE
                                        03/26/03    05/2/03    $3082.00          7
   21       0161716820101026 12/03/02   02/14/03   04/08/03      $85.00         23         GE
                                        02/06/03   03/19/03     $300.00         11
   23       0088033230101061 09/06/02   07/10/03   09/17/03     $418.00         39         GE
                                        07/10/03   09/17/03     $538.93         39
   36       0088609760101041 06/06/03   07/25/03   09/11/03    $2035.00        18          GE
   42       0074675880101126 09/11/02   12/03/02   01/09/03     $327.63        17          GE
                                        12/03/02   01/09/03    $1635.00        17
                                        12/03/02   01/09/03     $475.00        17
   44       0014247890101083 01/24/03   06/13/03   08/06/03    $400.00         24          GE
   52       0123452210101023 10/21/03   11/11/02   01/15/03     $240.00        35          GG
                                        11/14/02   01/15/03     $191.00        32
                                        11/15/02   01/15/03    $1035.00        31
   63       0133933620101065 03/29/03   08/26/03   10/16/03    $1080.00        31          GG
   67       0097013330101046 10/29/02   02/13/03   04/10/03     $460.00         26         GG
                                        02/13/03   04/10/03     $175.00         26
                                        07/03/03   08/20/03     $375.00         18
   79       0128049060101072 11/22/02   02/06/03   04/21/03      $60.00         44         GG
                                        02/06/03   04/21/03      $58.00         44
   83       0110014070101041 04/26/03   06/09/03   01/27/04    $1000.00        202         GG
   86       0146510480101016 10/01/02   12/06/02   07/22/03     $912.00        198         GG
                                        12/23/02   07/22/03     $874.44        181
                                        02/03/03   06/17/03    $1700.00        104
   87       0093089680101079 09/15/02   11/11/02   01/14/03    $190.00         34          GG
   93       0128430130101146 06/06/03   08/27/03   11/07/031    $167.00         42          GI
                                        08/27/03    01/07/03     $50.00         42
   97       0094956770104057 09/27/02   01/31/03    05/12/03    $624.96         71          GI
                                        01/31/03    04/23/03    $200.00         52
                                        01/31/03    04/23/03    $450.00         52
                                        01/31/03    04/10/03   $1190.00         39
                                        01/31/03    03/03/03   $1810.98          1
   99       0115574570101010 10/05/02   12/12/02    07/16/03   $2024.04        186          GI
COUNT: 18




* THE COMPANIES AVERAGE DELAY IN MAKING PIP PAYMENTS WAS 55 DAYS FOR THE ABOVE LISTED SAMPLES.



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MARYLAND INSURANCE ADMINISTRATION


Exhibit Q

Automobile “Total Loss” Claims

The Companies failed to make payment of PIP medical bills within thirty (30) days of
receiving satisfactory proof of claim for the following claims.

SAMPLE #       CLAIM#     DATE OF     DATE MEDICAL  DATE    BILLED AMOUNT     # OF DAYS   COMPANY
                           LOSS         BILLS OR   MEDICAL                  MEDICAL BILLS
                                     DOCUMENTATION BILLS                    OUTSTANDING
                                        RECEIVED    PAID
   36      0043084850103121 11/14/02     12/31/02  03/12/03     $597.69          41        GE
COUNT: 1




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MARYLAND INSURANCE ADMINISTRATION


Exhibit R

Automobile “PIP Only” Claims

The Companies failed to pay 1½ percent simple interest on PIP medical bills paid more
than thirty (30) days after receipt of satisfactory proof of claim for the following claims.

SAMPLE #        CLAIM#       DATE OF     DATE MEDICAL    DATE    BILLED AMOUNT     # OF DAYS   COMPANY
                              LOSS         BILLS OR     MEDICAL                  MEDICAL BILLS
                                        DOCUMENTATION     BILL                   OUTSTANDING
                                           RECEIVED      PAID
   16       0156799610101031 11/25/02       01/28/03    08/21/03      $120.00        175        GE
                                            02/17/03    04/22/03      $779.11         34
                                            02/17/03    04/22/03      $210.48         34
                                            02/17/03    04/22/03       $82.50         34
                                            02/28/03    04/22/03       $90.00         23
   19       0134518320101066 01/30/03       03/12/03    04/24/03      $250.00         13        GE
                                            03/26/03    05/02/03     $3082.00          7
   21       0161716820101026 12/03/02       02/14/03    04/08/03       $85.00         23        GE
                                            02/06/03    03/19/03      $300.00         11
   23       0088033230101061 09/06/02       07/10/03    09/17/03      $418.00         39        GE
                                            07/10/03    09/17/03      $538.93         39
   36       0088609760101041 06/06/03       07/25/03    09/11/03     $2035.00        18         GE
   42       0074675880101126 09/11/02      12/03/02     01/09/03    $327.63           17        GE
                                           12/03/02     01/09/03   $1635.00           17
                                           12/03/02     01/09/03    $475.00           17
   44       0014247890101083 01/24/03      06/13/03     08/06/03   $400.00            24        GE
   79       0128049060101072 11/22/02      02/06/03     04/21/03     $60.00           44        GG
                                           02/06/03     04/21/03     $58.00           44
   87       0093089680101079 09/15/02      11/11/02     01/14/03    $190.00           34        GG
   93       0128430130101146 06/06/03      08/27/03     11/07/03    $167.00           42         GI
                                           08/27/03     01/07/03     $50.00           42
COUNT: 10




GEICO Draft Report                                                                                    73
MARYLAND INSURANCE ADMINISTRATION


IN THE MATTER OF THE            * BEFORE THE STATE OF MARYLAND
                                *
INSURANCE ADMINISTRATION        * INSURANCE ADMINISTRATION
                                *
         v.                     *
                                *
GOVERNMENT EMPLOYEES            *
INSURANCE COMPANY (NAIC #22063) *
One Geico Plaza                 *
Washington, DC 20076-0001       *
                                *
GEICO CASUALTY COMPANY          *
(NAIC #41491)                   *
                                *
GEICO GENERAL INSURANCE         *
COMPANY (NAIC #35882)           *
                                *
GEICO INDEMNITY COMPANY         *
(NAIC #22055)                   * CASE NO. MIA-2005-04-059
                                *
*************************************************************


                         ORDER - CONSENT AGREEMENT


      This Consent Order (the “Order”) is entered into by Government Employees

Insurance Company, Geico Casualty Company, Geico General Insurance Company,

and Geico Indemnity Company (hereinafter collectively referred to as the “Respondent”)

and the Insurance Commissioner of the State of Maryland (“the Commissioner”).



      Pursuant to § 2-205 and § 2-209 of the Insurance Article of the Annotated Code

of Maryland, the Commissioner has made the following determinations:



      1.     At all times relevant to this Order, Respondent held a Certificate of

Authority from the State of Maryland to operate as an insurance company.




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MARYLAND INSURANCE ADMINISTRATION




       2.     The     State   of   Maryland,     Insurance   Administration    (hereinafter

"Administration"), conducted a Market Conduct Examination of Respondent, whose

home office is located at One Geico Plaza, Washington, DC 20076. The Examination

covered the examination period of September 1, 2002 through August 31, 2003.


       3.     The Examination, the details of which are contained in the Administration

Report No. 3866-03 (the “Report”), concluded that Respondent committed the following

violations of Maryland Laws and Code of Maryland Regulations (“COMAR”):

       •    Section 10-118(a)(1) of the Insurance Article;
       •    Section 10-130(a) of the Insurance Article;
       •    Section 11-341 of the Insurance Article;
       •    Section 27-212(d)(1) of the Insurance Article;
       •    Section 27-501(a) of the Insurance Article;
       •    Section 27-501(a)(2) of the Insurance Article;
       •    Section 19-508(a)(1) of the Insurance Article;
       •    Section 19-508(c) of the Insurance Article;
       •    COMAR 31.15.07.03B(13); and
       •    COMAR 31.15.07.06.

       4.     Both Respondent and the Administration agree to the remedial measures

set forth herein. The parties contend that this Consent Order is in the public interest.



       WHEREFORE, pursuant to § 2-204 and § 4-113 of the Insurance Article of the

Annotated Code of Maryland, the parties agree and it is hereby, with the Consent of the

Respondent, ORDERED, by the Commissioner, that


       A.     Respondent shall accept the Administration Report No. 3866-03 as final

and waives any right to a hearing on or judicial review of the Report.




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MARYLAND INSURANCE ADMINISTRATION




      B.      Respondent shall take corrective actions to address the violations noted in

the Report.


      C.      Respondent shall pay an administrative penalty to the State of Maryland

for the violations stated herein in the amount of twenty thousand dollars ($20,000.00)

within thirty (30) days of the date the Commissioner or his designee signs this Order.


      D.      Respondent agrees that all amounts paid under Paragraph C of this Order

shall not be included in or recoverable as expenses in any rate filing filed with the

Administration or any other regulatory authority.


      E.      Respondent shall, within 60 days of the execution of this Order by the

Commissioner or his designee, provide restitution to the policyholders as noted in

Report No. 3866-03. Evidence of payment, satisfactory to the Commissioner, shall be

submitted to the Commissioner within 90 days of the execution of this Order.


      F.      For the purposes of the Administration and for any subsequent and

unrelated administrative or civil proceedings concerning Respondent, whether related or

unrelated to the foregoing paragraphs, and with regard to requests for information about

the Respondent made under the Maryland Public Information Act, or properly made by

governmental agencies, this Consent Order will be kept and maintained in the regular

course of business by the Administration in the appropriate section of the

Administration.




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MARYLAND INSURANCE ADMINISTRATION


       G.        The parties agree that this Order resolves all matters relating to this

specific matter only, and the factual assertions and agreements contained herein are to

be used solely for the purposes of this proceeding and any other proceeding brought by

or on behalf of the Administration.


       H.        Respondent has had the opportunity to have this Order reviewed by legal

counsel of its choosing, and is aware of the benefits gained, and obligations incurred by

the execution of the Order. Respondent waives any and all rights of civil judicial review

of this Order.


       I.        Administrative penalties should be made payable to the Maryland

Insurance Administration and include the case number or name. Payment should be

sent to the attention of Amy Stupi, Appeals Clerk, at 525 St. Paul Place, Baltimore, MD

21202-2272.       Unpaid penalties will be referred to the Central Collection Unit for

collections.



       J.        All timeframes set forth in this Order may be amended or modified only by

subsequent written agreement of the parties.



       K.        The undersigned representative of Respondent affirms that he or she has

taken all necessary steps to obtain the authority to bind Respondent to the obligations

stated herein and, to the best of his or her knowledge and belief, has the authority to

bind Respondent to the obligations stated herein.




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MARYLAND INSURANCE ADMINISTRATION


      L.     This Order shall be effective upon signature of the Commissioner or his

designee.



      M.     Failure to comply with the terms of this Consent Order may subject

Respondent to further legal and/or administrative action.



      N.     Respondent does not admit liability in executing this Order.


      It is so ORDERED, this ___29th _____ day of ___April_____, 2005.


                                  Alfred W. Redmer, Jr.
                                  Insurance Commissioner

                                        Signature on file with original
                                  ________________________________________
                           by:    P. Todd Cioni, Associate Commissioner
                                  Compliance and Enforcement

RESPONDENT'S CONSENT

Respondent hereby CONSENTS to the representations made in, and to the terms of the
above Order.


Name:________Hank Nayden__________________

             Signature on file with original
Signature:   _______________________________


Title: _Vice President & Legislative Counsel______


DATE__4/20/05_________




GEICO Draft Report                                                               78

				
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