Washington, D.C. – Thirty-two states, representing 38% of the nation’s population, fail to provide information on the frequency of complaints against insurers, according to a report released today by the Consumer Federation of America (CFA). The good news is that most American consumers (62%) reside in states that supply at least some of this information.
But the CFA report noted that the greatest missed opportunity was the refusal of the National Association of Insurance Commissioners (NAIC) to release its more than one million complaint database to assist American consumers in their insurance purchases. “Although NAIC has these data by company in sufficient detail to make meaningful comparisons between insurers, it will neither publish these data nor release them to others to publish,” said J. Robert Hunter, CFA’s Director of Insurance and former Texas Insurance Commissioner.
“Complaint information is the only proxy that state insurance departments have devised to inform consumers of the relative quality of service to expect from an insurance company,” said Hunter. “The states have not undertaken surveys of consumer satisfaction, released comparative
statistics based on market conduct examinations, or devised other measures to assist consumers in determining service quality,” he said.
CFA undertook research to determine which states make this important information available to consumers to assist them in shopping. States supplied information they send to consumers to CFA for the four major lines of insurance (auto, home, life and health). CFA then graded the information based upon the number of lines of insurance for which a state supplies this information. If a state covered all four lines, it received an “A.”
If a state’s information covered 3 lines, the grade assigned was a “B;” 2 a “C” and 1 a “D.” If no information on complaints was available, the state grade was “F.”
A minority of state insurance departments supplies information to help consumers compare the service levels of insurance companies. Only 19 states supply such information on for auto insurance, 15 for homeowners, 14 for health insurance and 12 for life insurance.
States with an “A” grade are Florida, Illinois, Indiana, Kansas, Missouri, Oregon, Texas and Wisconsin. 26% of the nation’s people are getting excellent information.
States with a “B” grade represent 12% of the population. They are Colorado, Iowa, Ohio and Pennsylvania. California, Connecticut, New York and Washington received “C” grades. This represents 22% of the national population. “D” states were Arizona, Nevada, and New Mexico, which represent 3% of the people in the country.
The rest of the states, 32 of the 51 jurisdictions studied, received an “F.” These states do not supply complaint information (or did not reply to repeated requests for the information), despite the need that their consumers have for this vital information. 38% of the nation’s population live in these states.
CFA called upon the states to do more to get these data into the hands of its citizens. “We congratulate the states that are supplying this information to their consumers. States with poor grades should look to the states with ‘A’ and ‘B’ grades as examples of how to help consumers,” Hunter said.
CFA called on the NAIC to release its complaint database as soon as possible.
CFA called upon consumers of insurance to demand this information from their state insurance departments and ask their state commissioner to vote at the NAIC for the release of the complaint database.
Contact: Jack Gillis, 202-737-0766; J. Robert Hunter, 207-864-3953
CFA is a non-profit association of some 260 pro-consumer groups that was founded in 1968 to advance the consumer interest through advocacy and education.