Aetna Defies Governor in Pennsylvania
Aetna Casualty and Surety Co. said today that it will stick with its decision to stop selling car insurance in Pennsylvania despite a written admonition from Gov. Robert P. Casey, who called the giant insurer “arrogant and callous.”
On Thursday, Casey sent a strongly worded, three-paragraph letter to Aetna’s president, David A. Kocher, criticizing the company’s decision Wednesday to terminate business with its 200,000 Pennsylvania customers.
Casey said the company’s withdrawal violated Pennsylvania law and displayed “an arrogant and callous disregard for our state and your policyholders.”
“If you persist in your decision, I hereby put you on notice that Pennsylvania will use all remedies against your company which the law allows to protect the 200,000 Aetna policyholders in our state and the broad public interest of all our citizens,” Casey said in the letter.
Aetna, a Sears, Roebuck and Co. unit and the state’s fifth-largest insurer, said Pennsylvania’s new car-insurance law would cause it to lose $20 million during the next year.
The law enacted in February lowers all motorists’ rates by 10% as of July 1 or by 22% if they give up their rights to sue in most cases.
Aetna has also asked the courts to block the state Insurance Department from trying to foil its exodus from the car-insurance market.
The Insurance Department filed a cease-and-desist order on Thursday against Aetna to force it to stop sending out renewal notices and to reinstate customers who are dropped. Aetna then asked the U.S. District Court in Philadelphia to issue a temporary restraining order to block the department’s order.
John C. Hawkins, an Aetna spokesman, said in a statement that the company’s action was within its rights.
“The company holds the position that its actions in Pennsylvania to withdraw from the personal auto insurance market and begin orderly non-renewal of its policyholders are legal,” Hawkins said. “There is nothing in Pennsylvania law that prohibits us from taking this action.”
