Six insurance executives who are accused of mishandling claims from the 1994 earthquake in Los Angeles have donated almost $12 million to avoid billions of dollars of penalties, The Associated Press reports.
The funds will be used for education, consumer assistance and earthquake research, AP says.
Charges against the insurance companies include low-balling damage estimates, taking improper deductions for wear-and-tear and withholding information about benefits, AP says.
The threatened penalties – which ranged from $172 million to $2 billion – were extrapolated from worst-case scenarios and cited for shock value, the Insurance Commissioner’s office told AP.
An ongoing investigation of the California Research and Assistance Fund, a controversial 11.6 million earthquake research foundation, will include an investigation of the mishandled claims that prompted the fines, AP says.