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GEICO abruptly closes offices across California

According to the California Department of Insurance, GEICO closed all of its brick and mortar stores and continues to sell insurance policies online

CALIFORNIA, USA — GEICO offices have closed across the state of California, officials said Tuesday.

Any customers looking to see an agent in person are running into handwritten notes saying their local insurance office has closed. Angelina Barron was trying to get ahold of an agent in Natomas when she saw the sign for herself. 

"I'd be worried about it if they're closing or if all the insurance are going to close or is a recession coming or what is it?" she said.

Two people with family members employed by GEICO told ABC10 their loved ones were suddenly laid off last week and given only about a week’s notice.

According to the California Department of Insurance, GEICO closed all of its brick and mortar stores but continues to sell insurance policies online and through its app. The state agency said it is monitoring the situation closely to ensure all consumers are protected.

"The benefits of having a physical location in California with actual offices and  physical agents is that it's easier for the Department of Insurance to make sure those individuals have a license and meet California's very stringent standards – consumer protection standards for the sales of insurance," said former California Insurance Commissioner Dave Jones.

However, Steve Young, a lawyer for Independent Insurance Agents & Brokers of California, said the state's regulations have made it increasingly difficult for insurance companies to do business in the state.

"There's a very complicated insurance rating law that is in effect here, that makes it very difficult for insurers to have confidence that they can get the rate that they need from an actuarial perspective to ride these risks going forward," Young said.

It’s unclear if GEICO is strategizing to reduce business in the state. The company has not formally addressed the closures. The insurance company, in a statement to the Sacramento Bee, said they are not leaving the state.

"It’s kind of emblematic of what’s happening as far as the service industry," said Congresswoman Doris Matsui (D).  "It was the banks at first where the counters were shut down and all of that. I’m just hopeful they provide the best service possible, because that’s important for the customer."

Several agents told ABC10 they are under a gag order and could not comment. However, one told ABC10 that the Department of Insurance denied GEICO rate increases for years and the company had to find ways to lower costs.

WATCH ALSO: Covered California | How low-income Californians can get health insurance.

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