Litigation

ILLINOIS ATTORNEY GENERAL RIPS NICOR INSURANCE PROGRAM

By Mark P. Loftus, Esq.

As reported by Steve Daniels in the May 3, 2010 issue of Crain's Chicago Business, Illinois Attorney General Lisa Madigan is unhappy with Nicor. Madigan is claiming that Nicor's gas pipe repair service insurance is a rip-off. The insurance plan, officially known as ComfortGuard, covers the cost of repairing gas pipes in customer homes. According to Madigan's office, the Nicor advertising campaign affiliated with the program is misleading. The ads allegedly imply that customers who don't buy the insurance will have to hire outside contractors to fix the pipes. In reality Nicor is obligated to repair pipes inside the home.

About 20% of Nicor customers[440,000] purchased the insurance, which sells for $4.95 a month. Nicor pocketed $26 million in profits from the program last year - while paying out only $60,000 in claims. Madigan is asking the Illinois Commerce Commission[ICC] to bar Nicor from hawking ComfortGuard.

In a statement, Nicor noted that ComfortGuard "...provides a real value to its many customers..." Nicor is expected to specifically respond to criticisms in hearings before the ICC. The ICC is expected to rule on the controversy sometime in early 2011.

Full post as published by Illinois Lawyer Blog on May 04, 2010 (boomark / email).