ST. PAUL (AP) -- State Farm Insurance will pay $775,000 in penalties and investigative costs to settle three matters pertaining to its Minnesota auto and homeowner insurance policies, the state Department of Commerce said Wednesday.
State Farm, which denied all of the allegations, also agreed to change its business practices, said Commerce Commissioner Jim Bernstein.
After a review of more than 2,000 auto insurance claim files, Bernstein alleged that State Farm, based in Bloomington, Ill., violated provisions of Minnesota's no-fault insurance law. That law requires the policyholder's insurance company to pay all reasonable medical expenses, regardless of who is at fault in an accident.
The state alleged that State Farm pressured independent medical examiners to change their opinions to reduce what the company had to pay in personal injury claims.
Under terms of the $500,000 auto insurance settlement, Bernstein said State Farm agreed to implement procedures that will prevent the company from influencing or changing the results of independent medical examinations by its employees or vendors.
The company also agreed to:
* Stop using chiropractor examination reports to deny or reduce personal injury benefits for non-chiropractic medical treatments.
* Stop forcing policyholders to sue for benefits they are entitled to under law.
* Provide all relevant medical records to the independent medical examiner before the examination.
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