May 2, 2012

Department of Insurance returns more than $2 million to consumers in first quarter of 2012

Health insurance, claim denial drive Missouri complaints

Jefferson City, Mo. - Consumers who filed complaints with the Missouri Department of Insurance have received an additional $2.2 million in claim payments from their insurance companies in the first quarter of 2012. The department received more than 10,000 complaints and inquiries this year compared to nearly 7,500 at this time last year.

"Missouri consumers who have claims denied by their insurance companies or feel their claim settlement is unfair should not assume they've run out of options," said John M. Huff, director of the Department of Insurance. "Our expert regulators are here to provide help at no charge to Missouri policyholders who reach an impasse with their insurance companies."

Health insurance continues to generate the most complaints from consumers, up more than 100 from this time last year, followed by auto and homeowners insurance. The most common reasons for complaints were denial of claims, claim delays and unsatisfactory offers.

Some notable accomplishments from the first quarter:

  • A Joplin woman was having repairs done to her home after the May 22 tornado when her contractor found more damage. The woman was having a difficult time getting her insurance company to pay for the additional repairs and her living expenses. After contacting the department, the insurance company issued payment for the woman's home, property and living expenses, which resulted in an additional payment of $122,500.
  • The department returned more than $50,000 to a Dunklin County man who used the department's Life Policy Locator and discovered one of his deceased parents had a life insurance policy. After submitting the correct forms and certificates to the department, the information was sent to the state's licensed insurance companies to find a match in their databases. The company that held the policy sent the man a check for $50,137.
  • A Springfield woman was having a difficult time with her insurance companies after seeking cancer treatment from a hospital in Texas. Since the woman had recently changed health plans and the hospital was out of state, her former insurance company paid for the services received at the hospital. The company soon realized its error and billed the woman for more than $8,000. The department argued the hospital was obligated to submit a claim to the correct insurance company and refund any overpayment, but the hospital refused. The department then submitted letters to the insurance companies, the Texas insurance commissioner and a state legislator, requesting the companies work together to correct the problem. Once the letters were received, the claim was resubmitted to the correct insurance company and payment was soon made.

The department has also been busy in the first quarter assisting consumers affected by the tornadoes and severe weather that swept across southwest Missouri Feb. 28 through March 1. Representatives from the department spent three days in Branson helping consumers, along with spending a week at U.S. Small Business Administration Disaster Loan Outreach Centers in Dallas, Stone and Taney counties.

In the first quarter of 2012, the department handled more than 1,030 formal complaints and assisted nearly 2,640 consumers in writing and another 6,600 over the telephone. 

The top categories of complaints were:

   By reason

   By line of insurance

  Denial of claim (240)

  Health (304)

  Delay of claim processing (158)

  Auto (202)

  Unsatisfactory offer (130)

  Homeowners (162)

The department's Market Conduct Section has returned $663,000 to consumers as a result of exams and investigations in the first quarter. Enforcement actions also resulted in nearly $243,000 in fines for insurance companies.

In market conduct exams and investigations, the department reviews insurance company documents detailing the treatment of policyholders, from the rates the companies charge to the way claims are handled to other responsibilities under state law. Exams can result in refunds for consumers, fines, changes in business practices or other remedies.

Consumers with complaints or questions about their insurance claims or policy provisions can call the Insurance Consumer Hotline at 800-726-7390 or file a complaint at insurance.mo.gov.

About the Missouri Department of Insurance, Financial Institutions & Professional Registration

The Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP) is responsible for consumer protection through the regulation of financial industries and professionals. The department's seven divisions work to enforce state regulations both efficiently and effectively while encouraging a competitive environment for industries and professions to ensure consumers have access to quality products.

###