Formal written complaints to The Division of Insurance surpassed 1000 in 2010
In our ongoing look at The Division of Insurance’s work with consumers’ complaints about insurance we now take a look at formal written complaints made to the DOI.
The Division of Insurance staff estimates that it resolved nearly 1,600 written consumer complaints recovering more than $1,400,000 dollars for consumers for calendar year 2010 (the most current year for which data is available.) This is the fourth year in a row that the Division’s staff has helped secure over $1,000,000 dollars for consumers in recoveries involving their insurance.
Any Massachusetts consumer of an insurance product marketed or sold in Massachusetts is eligible to file a written consumer complaint with the Division of Insurance. Once a written complaint is received, the Division then forwards it to the appropriate company or producer who has 14 days in which to file a response. The Division’s staff then reviews the complaint and licensee’s reply in order to determine a resolution.
In addition to resolving written complaints, the Division of Insurance also maintains a complaint database which serves both to facilitate proper case management and the reporting of complaint data. As the Division explains in its 2011 annual report,
Monthly reports generated from the complaint database allow the Division to look for patterns of unfair or deceptive practices by producers, insurance companies, or other licensees. When appropriate, the information may be referred either to the Special Investigations Unit or Market Conduct Section for further action. “Slow pay” patterns and other questionable industry trends are brought to the attention to the Division’s Financial Surveillance staff, as these may be early indicators of liquidity or solvency problems.
Here is a look at the written complaints by line of insurance and by category:
The Division of Insurance Lists By Percentage the main reasons for consumer complaints
|1. Denial of Claim||20.1%|
|3. Premium & Rating||9.7%|
|4. Unsatisfactory Offer||7.2%|
|6. Premium Notice & Billing||3.7%|
|7. Premium Refund||3.4%|
|8. Information Requested||2.5%|
|9. Inadequate Network||2.5%|
|10. Surcharge/Merit Rating||1.3%|
|11. Policy Delay||1.3%|
|12. Adverse Determination||1.3%|
How fast and in what manner the Division resolves written consumer complaints
The Division says that while the majority of complaint dispositions involve a monetary outcome, it is not the only resolution to written complaints which occurs. In addition to monetary recoveries, the DOI also helps consumers “…restore policies, rescind cancellation or waive fees.”
Here is a breakdown of the type and amount of dispositions the DOI handled in 2010:
|Disposition Type||Number of Recoveries|
|Referral to Proper Agency||123|
|Refer to Discipline||8|
The Division says that response time to consumer complaints improved in 2010 from 2009, when its Consumers Services operated at 65% of operational staffing. For example, in 2009, only 60 percent of complaints were closed or resolved within a 90 days period. In 2010, that number jumped to 73 percent.