State posts 2011 insurance complaint stats

July 14, 2012
| By Pete Daly |
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The Michigan Office of Financial and Insurance Regulation recently released its 2011 consumer complaint statistics for insurance companies doing business in Michigan, which the agency says consumers may want to refer to when shopping around for insurance coverage.

The statistics include complaints filed against carriers writing accident and health, annuity, auto, homeowners and life insurance policies. During 2011, the agency received 3,441 insurance company-related consumer complaints, down from 3,645 in 2010, according to Jason Moon, public information officer for OFIR.

The statistics cover companies that wrote $1 million or more in premiums for the 2011 calendar year. OFIR said statistics on companies doing less than $1 million in premiums in Michigan are highly variable and may not be adequate measures of a company’s track record.

Complaints were broken down by type of coverage, with 48 percent of insurance company complaints involving accident and health policies, 21 percent automobile coverage and 15 percent homeowners insurance.

Included in the statistical breakdown are insurance company complaint ratios, determined for each insurer by dividing the insurer’s dollar amount (in millions) of annual written premiums into the number of filed complaints.

For coverage of accident and health, Blue Cross Blue Shield of Michigan — the state’s largest carrier — had 742 complaints in 2011 on total premiums of more than $6.4 billion, with a resulting complaint ratio of .12.

Humana Insurance Co. of Louisville, Ky., was the second largest accident and health insurer with total premiums of more than $593 million. Its 50 complaints equaled a complaint ratio of .08. The third largest was United Health Care Insurance Co. of Hartford, Conn., with more than $539 million in premiums and 55 complaints, a ratio of .10.

Priority Health was the subject of 27 complaints, on total premiums of almost $253 million, a ratio of .11.

In the same category of accident and health, American Medical and Life Insurance Co. of New York, N.Y., had the largest complaint ratio at 7.15. It was the subject of 8 complaints on total premiums of $1.12 million.

The complaint statistics can be found at www.michigan.gov/lara. Click on the Agencies, Bureaus and Commissions, tab in the left column, then click on Office of Financial and Insurance Regulation. On that page, open Consumer News.

The OFIR statement noted that while the ratios provide complaint information that can be compared across insurance companies, “consumers need to keep in mind that complaints don’t necessarily mean there has been wrong-doing on the part of the company.”

Although a majority of complaints do not result in actions against insurance companies or agents, OFIR offers to assist consumers who file complaints by resolving questions or problems concerning the terms and benefits provided by their policy, the premiums charged, and their rights pursuant to Michigan insurance laws. The agency urges consumers to contact their insurance company or agent about the perceived problem directly before filing a complaint.

In 2011, more than $5 million in additions to claim payments, premium refunds and policy rating changes were received by consumers through OFIR’s resolution of complaints. Last year, 50 percent of insurance company complaints involved claim handling, 25 percent customer service and 14 percent underwriting.

Complaint ratios are provided as a tool to help consumers choose an insurance company, but other factors may be more meaningful when comparing companies, states the OFIR website. Those factors include premiums charged, benefits provided by a specific contract, financial stability of the company and levels of service provided.

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