January 23, 2012

Department of Insurance returns record recoveries to Missouri consumers in 2011

$21 million additional paid by insurance companies

Jefferson City, Mo. - Because of actions by the state Department of Insurance, Missouri consumers received an additional $21 million from their insurance companies, far exceeding the department's previous record of $14.6 million set in 2009.

"This record $21 million for Missouri consumers is a reminder that we can help if they reach an impasse with their insurance company," said John M. Huff, director of the Missouri Department of Insurance.  "Missourians all across our state did lots of heavy lifting with the unprecedented natural disasters in 2011, and our department was no different."

Significant recoveries were returned to consumers related to the tornadoes in Joplin ($4.5 million), St. Louis ($640,000) and Sedalia ($250,000).

Statewide, the department handled more than 3,800 formal complaints and assisted more than 8,500 additional consumers in writing and another 21,000 over the telephone.

The most common categories of complaints received from consumers statewide were:

By reason

By line of insurance

Claim denial (925 complaints)

Health (1075)

Claim processing delay (648)

Auto (846)

Unsatisfactory settlement offer (510)

Homeowners (639)

Some notable accomplishments from the past three months:

  • A Joplin resident was offered $22,000 for his home and other structures for damages following the May 22 tornado. After the homeowner filed a complaint with the department, the insurance company agreed to meet with an engineer and contractor of the homeowner's choice. The home was declared a total loss, which resulted in a payment of $98,000 to the homeowner.
  • A Chillicothe woman was having trouble getting a death benefit from her husband's life insurance policy seven months after a claim had been filed. After filing a complaint with the department, the beneficiary received a claim payment of more than $250,000.
  • Parents of a newborn child from Boonville were having trouble adding their child to their health insurance plan. After filing a complaint with the department, the family's health insurance company paid nearly $18,400 in claims that covered the child from birth to a subsequent surgery.
  • A St. Louis woman contacted the department alleging signatures were forged on a recently purchased annuity contract. The department required the insurance company's fraud investigation unit to fully review the inconsistencies of the signatures. After investigating the issue, the company issued a full refund of more than $630,000.

The department's Market Conduct Section managed nearly 150 examinations and investigations in 2011, returning $1.77 million to consumers who were underpaid on claims or whose premiums were too high. Those enforcement efforts also resulted in $465,000 in fines from 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 they handle claims 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 Consumer Hotline at 800-726-7390 or file a complaint at insurance.mo.gov.