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.



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 five U.S. territories. The association’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, it is the oldest association of state officials. For more information, visit the NAIC on the Web at: http://www.naic.org/press_home.htm