Sarah Parker wrote me, forwarding a quick reading blog, Liberty Mutual to Refund $7.7 Million in Consent Order: What Minnesota Policyholders Need to Know. I believe she sent it to me because of my recent post, Liberty, Liberty, Li-ber-ty.  

One of the important points of her post was the complexity of many large insurance organizations, which many think are just one company under one brand: 

To the general public, they might only see a main trade name as the brand offering their insurance policy. However, behind the scenes, the specific terms of their policy, the rates they’re offered, and the regulatory compliance behind that policy might be managed by a subsidiary.

The naming of multiple companies in such orders underscores the complexity of large corporations and the regulatory landscape they navigate. With each state having its own regulations, managing these can get complex!

It’s a testament to the thoroughness of regulatory bodies in ensuring that every entity, regardless of its relationship with a parent company, remains compliant with the law.

For consumers, it’s a reminder that the brand name they’re familiar with might represent a web of interconnected companies working together to provide their services.

Insurance brands often advertise price and also mention something about fair claims service. In Insurance Company Advertisements and Promises of Peace of Mind Versus the Reality of Claims Treatment, I suggested that regulators require insurance companies to turn over the internal claims operating guidelines to determine if the insurance companies are truly providing that fair claims service: 

Why shouldn’t insurance regulators require insurance companies to provide claims bulletins and claims guidelines about how claims will be handled at the point of sale and during the claims process? If the insurer is acting in good faith, why would it be afraid to turn over and publish those directives? It might lead to much better and fair treatment, which is promised in the first place.

The federal government has its flood claims manual publicly available for all to see how adjusters are supposed to handle claims. Why shouldn’t there be a rule supported by the National Association of Insurance Commissioners requiring all insurance companies to publish their claims manuals regarding the handling of first-party property insurance policies online? What is there to hide?  

I have never heard of an insurance company publicly saying this would be bad public policy. Such a rule may stop some of the cheating of bad market players and provide greater trust in the industry. 

Thought For The Day 

A lack of transparency results in distrust and a deep sense of insecurity.

—Dalai Lama