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NY officials say insurer to refund $4.56 million

ALBANY, N.Y. (AP) -- New York officials say that Zurich American Insurance Co. has agreed to refund $4.56 million to policyholders of its statutory disability insurance policies after failing to spend at least 60 percent of total premiums on claims as required under law.

The Department of Financial Services says Monday refunds to about 73,000 policyholders, mostly small businesses, involve policies issued in 2009, 2010 and 2011.

Officials say the insurer overestimated the amount it would spend on claims when policies were priced.

The insurance provides temporary benefits to partly replace an eligible employee's wages when disabled by an off-the-job illness or injury and during pregnancy.

A Zurich spokesman says it completed refunds, and while the company is withdrawing from the statutory disability market, it continues to uphold its responsibilities to policyholders.