Audit - Response to insurance complaints sometimes delayed

JEFFERSON CITY, Mo. -- Missouri is doing a good job of responding to consumer insurance complaints but could be doing even better if all insurance companies would cooperate with the state, according to an audit released Tuesday.

State Auditor Claire McCaskill's office said the state Insurance Department resolves about 80 percent of the 500 complaints it receive each month.

But slow or incomplete responses from insurance companies are hindering the resolution of some cases, the audit said. Also, the Department of Insurance has failed to fine some companies that did not respond to state reports of consumer complaints.

The audit reviewed a sample of the more than 9,000 complaint files within the department's Division of Consumer Affairs from Jan. 1, 2000, to Sept. 30, 2001.

The department said in many cases, insurance companies were not fined because the hearing process was not cost effective and the $100 penalty did not have a significant financial impact on companies.

"I think overall they are getting timely responses, but obviously there are a few companies that are not taking serious their obligation to provide information on certain claims," McCaskill said.

Some cases were closed before companies responded, the audit said. Companies have 20 days under state law to respond after the state receives a complaint.

Some department staff told auditors that they did not believe it was their place to question or audit a company's response. One case was not followed up on because an insurance company failed to provide any documentation at all, including a copy of an insurance policy.

Since it would require legislative action to raise fines, the department said it is considering alternatives such as issuing subpoenas to encourage timely company responses.

Department officials said the behavior of insurance companies must change if the state is to receive responses to all consumer complaints.

Calvin Call, director of the Missouri Insurance Coalition, said it often takes time to review a complaint before a company can respond to the state. The coalition represents 85 insurance companies across the state.

"I understand the meter should start running, but you also have to analyze the situation and determine whether a (complaint) is right or is wrong," Call said. "Both the department and the companies are in the business of serving the consumer and under most circumstances are doing their best to do that."

The audit also found that some delays were due to slow state handling caused by the number of complaints. It said supervisors failed to review cases before they were closed.

The audit recommended that written procedures be established to deal with complaints and the use of enforcement tools. There should also be a review process before complaints are closed, the audit said.

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On the Net:

State Auditor: http://www.auditor.state.mo.us

Insurance Department: http://www.insurance.state.mo.us