Consumer Insurance Complaints Up from 1996

Springfield, IL - Consumers filed 14,081 complaints about insurance in 1997 according to a statistical summary released today by the Illinois Department of Insurance. Of that number, 12,971 were complaints against insurance companies and 1,110 were against health maintenance organizations. In 1996, the Department investigated 12,362 complaints against insurers and 719 against HMOs.

"Although total HMO complaints jumped by 54 percent from the previous year, HMOs generated only 8 percent of all complaints in 1997," said Acting Insurance Director Arnold Dutcher. "Such an increase is not surprising in light of heightened public interest in the HMO industry and managed care issues and the growing number of people covered by HMOs. Still, less than 1/2 percent of HMO enrollees filed complaints with the Department of Insurance."

Equally unsurprising is that claims handling continues to account for the majority of complaints in most lines. Claims handling complaints range from payment delays to dissatisfaction with the company's settlement offer to denial of a claim. "Consumers tend to get a closer look at their coverage when they have a claim," Dutcher said. "If they didn't review their policy or ask questions at the time of sale, they are more likely to encounter problems during the settlement process."

For HMOs and some health insurers, recent women's health care initiatives such as minimum maternity stays, post-mastectomy hospitalization and designation of an ob/gyn as a woman's principal health care provider, generated numerous inquiries and written complaints.

Many of those problems stemmed from confusion over the effective date. Although legislative mandates carry an effective date, they are usually not added to group contracts or individual policies until the renewal date which could be up to eleven months later.

In addition to the composite complaint analysis, the Department of Insurance calculates a complaint ratio for all licensed HMOs regardless of the number of complaints and for auto, homeowners, life and accident and health insurance companies that received ten or more complaints. Ratios measure the number of written grievances in relation to Illinois premium volume, policies in force or membership. A rank of 1 reflects the lowest complaint ratio of all companies listed for the line of coverage.

1997 Composite of Insurance Complaints