James Burton Insurance Agency

I received your complaint today regarding *** and Cobalt Services. The complaint misstates numerous facts and the customer fails to accept responsibility for the changes made within his business, both employment status and job duties. This policy has been in force since April 2015 and was reported that the customer had a salesperson and clerical staff (his ex-wife) covered under his policy. During the annual audit it was discovered that the person was not an inside salesperson, but actually delivering product and unloading equipment at job sites. The risk for injury and job description greatly differs from a person standing around inside to a person out on the freeways and oilfields delivering equipment. For the second person his ex-wife in years prior she was his spouse and spouses were excluded from work comp rates. Effective in January of that year the State of CA guidelines changed as to who would be considered and excluded as an employee from rating as they had to have some ownership in the business. Considering his ex-wife still worked there, but did not have any ownership in the business her wages are now rated and not excluded. Mr. fails to acknowledge that for years the job description was either reported in error or misrepresented to obtain a better rate. In the past this account was handled by an HR person, but he took over and advised of the proper job duties in turn causing his rate to be increased. So the increased job class and his wife being rated are the reason for the increase. Both my company and our corporate office gave him over 90 days to dispute his audit and he simply kept restating the exact same thing he did in the complaint. That nothing had changed, when it really did and he is upset that following audits the balance is due in full. After months of working with auditing and the customer and he began to call names I then referred him to our District office. His attitude and demeanor toward the district office was similar to what I had been dealing with so he was then referred to our underwriting, rating, and customer resolutions department with similar info to what I stated above as the reason for the increase. If you have any additional questions or need more information, please don't hesitate to contact our corporate office.

I am attaching several statements and documentation so that you can attempt to grasp the entire picture in addition to what I already sent. I am going to address each item of major concern you list in your letter as well. You will see a detailed letter from our corporate office explaining the charges to Mr., this letter was after emails and conversations from at least 4 different people including myself, District Manager, Conflict Resolution Department, Audit Department, and Customer Resolutions.

09/24/18 – Unauthorized Charge: This charge posted following a bill and notification that was mailed out on 9/4/18 and Mr. did not attempt to call and stop the transaction. This charge occurred following the completion of the 2017-2018 policy period audit findings. Mr. had an employee classified as a salesperson and not someone who was delivering product and setting up equipment. Following the audit the job class code changed and resulted in a higher rated classification for that employee. He also had a spouse that was previously excluded her wages per state law, but they got a divorce and she lost ownership wo her wages are now ratable per state of California guidelines that changed in 2017. At the end of an audit because it is from the prior year it is premium that is already due and past due so it is included in the next bill.

10/24/18 – Nothing happened because the insured said he disputed he audit findings and was supposed to provide documentation to support his dispute. All charges were suspended to give him time to provide info in the next 30 days.

11/26/18 - Unauthorized Charge: Due to no documentation being provided the charge of $4,950.34 was charged to his account. This charge was because following the audit the rating factors were no changed and due to his delay on the initial audit it was at the new rate for multiple months. A bill was sent 15 days prior to the charge and he did not contact us to dispute any upcoming charges or changes that were sent to him.

11/29/18 – Unauthorized Credit” He called and said he was still gathering his facts from the audit and could we credit his account back which we did.

12/24/18 – Unauthorized Charge: Charge was only $32 even though the bill was higher. At this point we still had not received any payment from the customer since 9/24/18 and no response to the audit dispute from the information he said he was gathering.

1/24/19 – Unauthorized Charge: $6,668.16 was charged form the credit amount of $4,950.34 plus additional months now that he had not made a payment. No payments received in over 4 months.

2/24/19 – Unauthorized Charge: This is his new monthly payment with the employees being properly rated.

The first large payment was for the policy term that the audit was for the prior year of 2017. The second large payment was for the current policy term in getting it current from the time policy period started through current date.

See all attachments of statements, letters, audit findings.

If you have any questions please don’t hesitate to contact my office.