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NAIC Cites Top Insurance Complaints for 2007
NAIC CITES TOP INSURANCE
COMPLAINTS FOR 2007
KANSAS CITY, Mo. (Jan. 30, 2008) — Recent statistics reflect a continuing decrease in consumers’ insurance complaints for the fourth consecutive year, although the grounds for those complaints remain relatively unchanged.
According to data released by the National Association of Insurance Commissioners (NAIC), the top three reasons consumers filed formal complaints against their insurance companies in 2007 were delays, denials of claims and unsatisfactory settlement offers. Policy cancellations and premium/insurance rating issues completed the top five.
The NAIC collected the data through its 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. First established in 1990, the CDS was significantly expanded in 1998 and now houses data on more than 2 million complaints.
A total of 222,814 consumer complaints were reported to the CDS in the 2007 calendar year. This represents a 3.6 percent decrease from the number of consumer complaints reported during the 2006 calendar year, according to data released in March of last year. This information is based on the submission of data to the NAIC from the state insurance departments. The CDS is continually updated, as new information is received from the states on an ongoing basis. The NAIC does not collect all complaint data from all states.
Aggregate data compiled from the CDS can be accessed on the NAIC’s Web site through the Consumer Information Source. By accessing this program, 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.
Below is a chart detailing the top five types of complaints and the top five complained about types of insurance coverage for 2007. The chart includes the total number of complaints (for complaint type and line of coverage), followed by the percentage of overall complaints each type represents. (For example, “denial of claim” comprised 14.7 percent of all complaints received by the NAIC in 2007.)
Top Five Types of Complaints in 2007
|
|
Total No. |
Percentage |
|
|
Delays |
42,524 |
16.0% |
|
|
Denial of Claim |
39,152 |
14.7% |
|
|
Unsatisfactory Settlement/Offer |
26,127 |
9.8% |
|
|
Cancellation |
12,240 |
4.6% |
|
|
Premium and Rating |
11,916 |
4.4% |
Top Five Complaints by Type of Coverage in 2007
|
|
Total No. |
Percentage |
|
|
Accident and Health |
71,407 |
36.4% |
|
|
Auto |
67,327 |
34.4% |
|
|
Homeowners |
24,530 |
12.5% |
|
|
Life and Annuity |
17,727 |
9.0% |
|
|
Commercial Multi-Peril |
3,675 |
1.8% |
About the NAIC
Headquartered in Kansas City, Mo., 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 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.
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