Miscellaneous

Insurance Lobbyists Twist Facts Says National Association of Insurance Commissioners

By E L Eversman

The National Association of Insurance Commissioners (NAIC) today released a press statement defending its members from insurer criticisms of slow administrative filing processes. Kansas Insurance Commissioner and President of NAIC, Sandy Praeger, refuted the criticism from “high-paid insurance lobbyists” and noted the irony of insurance representatives complaining of slow action on the part of the state insurance regulators.

?It is ironic that as they complain about process delays, consumers tell us that some insurance companies are slow to pay claims. In fact, 60 percent of consumer complaints reported to the NAIC by states are the result of claims handling problems caused by insurance companies. A large majority of them due to slow claims payment processes or outright denials.?

Commissioner Praeger had some other searing comments for the insurance industry, and noted that slow approval often lay with insurers’ failures to comply with state laws or to offer sound products.

?Insurance products are often complicated. They contain separate premium rates for every zip code, application forms with confusing questions, and an abundance of advertising materials promising everything from peace of mind to health and wealth,? said Praeger. ?When insurers carefully review their requirements and submit good applications, the approval process is very fast. When companies fail to comply with state laws or offer questionable products, it takes time to review and correct their work to make sure that products deliver the benefits promised to consumers.?

?State regulators invest heavily in tools like SERFF to provide the industry the speed-to-market that companies need to compete,? said Praeger. ?It is time for the industry to address speed-of-payment to consumers.?

Consumers will be cheering statements such as these, especially because some insurers take considerable time investigating claims or simply tell consumers, “We don’t pay for that.” Given the fact that state laws have rendered all drivers on the roads a captive market for insurers, consumers have every right to expect strict accountability of insurers by state insurance regulators. NAIC would serve consumers well if it started looking into actual grass-roots-level claims handling practices of insurers. I have little doubt regulators would be troubled by what they might find.

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Full post as published by AutoMuse on April 04, 2008 (boomark / email).