For Immediate Release
NAIC REPORT LISTS TOP
CONSUMER COMPLAINTS ABOUT INSURANCE COMPANIES
Consumers Cite Delays, Denials,
Unsatisfactory Settlements
(January 19,
2006, Kansas City, MO) - The top three reasons consumers filed formal
complaints against their insurance companies in 2005 were delays, denials
and unsatisfactory settlement offers, according to data collected by the
National Association of Insurance Commissioners (NAIC). Following these claims handling
issues, consumers complained most about policy cancellations and premiums/insurance
rating issues. That complaint
pattern has remained relatively consistent during the past four years. A total of 199,639 complaints were
filed by consumers in 2005, a 22.5% decrease from 2004.
The NAIC maintains a centralized electronic Complaint
Database System (CDS), through which states voluntarily report ‘closed’
complaints. (A closed complaint is a complaint that has been investigated
and resolved to the satisfaction of the state or jurisdiction in which it
is filed.) The CDS, first established in 1990, was significantly expanded
in 1998 and now houses 2.2 million complaints.
“Data on complaints can be extremely valuable to
consumers who are in the midst of researching different insurance options,”
said Catherine J. Weatherford, NAIC Executive Vice President and CEO.
“Consumers can easily search this data right on our Web site or call their
state insurance department.
Giving them access to it is one way we are helping consumers get
smart about insurance.”
Aggregate data compiled from the CDS can be accessed by
clicking on the Consumer Information Source link on the NAIC home page at www.naic.org. By accessing this link,
consumers can obtain company-specific complaint ratios (the ratio of the
company’s market share of complaints compared to the company’s market share
of premiums for a specific policy type), as well as aggregate counts of
complaints by state and by type of coverage for specific companies.
In 2005, auto liability was the type of coverage that
caused the most complaints, followed by complaints related to health
insurance, auto physical damage, Health Maintenance Organizations (HMOs)
and disability income insurance.
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Top 5 Types of
Complaints in 2005
|
|
|
|
|
Total #
|
Percentage
|
|
Delays
|
43,840
|
21.96%
|
|
Denial of Claim
|
37,346
|
18.71%
|
|
Unsatisfactory Settlement/Offer
|
28,414
|
14.23%
|
|
Cancellation
|
12,865
|
6.44%
|
|
Premium & Rating
|
12,259
|
6.14%
|
|
|
|
|
|
Top
5 Complaints by Type of Coverage in 2005
|
|
|
|
|
Total
#
|
Percentage
|
|
Auto
|
80,867
|
40.51%
|
|
Accident and Health
|
67,992
|
34.06%
|
|
Homeowners
|
23,446
|
11.74%
|
|
Life and Annuity
|
17,208
|
8.62%
|
|
Commercial Multi-Peril
|
3,580
|
1.79%
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About the NAIC
About the NAIC Headquartered in Kansas City, Missouri, the National Association of Insurance Commissioners (NAIC) is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and the five U.S. territories. The NAIC’s overriding objective is to assist state insurance regulators in protecting consumers and helping maintain the financial stability of the insurance industry by offering financial, actuarial, legal, computer, research, market conduct and economic expertise. Formed in 1871, the NAIC is the oldest association of state officials. For more than 135 years, state-based insurance supervision has served the needs of consumers, industry and the business of insurance at-large by ensuring hands-on, frontline protection for consumers, while providing insurers the uniform platforms and coordinated systems they need to compete effectively in an ever-changing marketplace. For more information, visit NAIC on the Web at: http://www.naic.org/press_home.htm
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