A New York-based automobile insurer will pay out $992,000 to customers it overcharged and pay a $360,000 fine for improperly imposing a 30% rate hike.

The New York State Insurance Department said Clarendon National Insurance Co. will make the refunds to 1,227 policyholders who live mostly in New York City, and Nassau and Suffolk counties.

Regulators said the actions are the result of a department review of Clarendon conducted after the insurer requested permission to withdraw from the private passenger automobile insurance market in the state. An audit revealed that Clarendon imposed the rate increase improperly in April 2006.

Clarendon also applied incorrect credits to some customers between 2003 and 2009. It was found to have not applied credits in some years and in other years applied credits to which the policyholder was not entitled, officials said.

Clarendon National Insurance Co., a subsidiary of global reinsurer Hannover Re, is one of four property-casualty companies under the Clarendon name. According to its website, the other companies are Clarendon America Insurance Co., Clarendon Select Insurance Co. and Harbor Specialty Insurance Co. All four are no longer actively writing new business in any state.

Clarendon representatives did not immediately respond to requests from IFAwebnews.com regarding the New York agreement.