In late January, I wrote a blog post highlighting the absence of any published market conduct exams on the Oklahoma Insurance Department website after 2009, despite the OID’s claim that “[a]s part of the regulation process, we perform and publish Market Conduct Examinations.” In an attempt to figure out what was going on, I submitted an open records request seeking all OID market conduct exams conducted after 2009 and promised I would keep everyone posted.
As a law firm whose sole focus is representing policyholders in insurance disputes, we spend a lot of time alleging insurance companies are engaging in bad faith practices and fighting tooth and nail for evidence that demonstrates this. We get what information we can through the discovery process, the rules and logistics of which can vary drastically depending on the state, the court, and even the judge. Discovery must be tailored to each individual case, and insurance companies invariably object to requests for information about wider business practices or schemes as too vague, too broad, too burdensome, or irrelevant. This can make obtaining any evidence of bad faith practices we already know are occurring a long and costly battle.…
Insurance company property claims manuals are often sanitized to prevent criticism. They contain general and often give vague instructions to claims adjusters. The actual instructions are often provided in verbal meetings with claims managers, which may have PowerPoint presentations, email claims bulletins, and other non-specific documents which are not placed in claims manuals. Why don’t market conduct examiners and departments of insurance investigators ask for these types of documents when investigating insurance company claims practices and conduct?…
The Florida legislature recently passed a sweeping property insurance bill that severely limited the ability of policyholders to sue their own insurance companies for wrongful claims conduct and took away a 100-year-old law requiring the losing insurance company to pay the policyholder’s attorney fees. To put lipstick on this pig of legislation, the legislature added language allegedly making it easier for the insurance commissioner to request a Market Conduct Examination of a property insurance company’s claims practices. While some policyholders may think this helps, the insurance industry knows that market claims examinations have little impact on curbing significant wrongful claims practices.…
Louisiana Insurance Commissioner Jim Donelon has examined the claims conduct of five insurance companies. As a result of these Targeted Market Conduct Examinations, he has proposed substantial fines. The Louisiana Department of Insurance News Release announcing these fines noted in part:…
Continue Reading Louisiana Insurance Commissioner Proposes Fines Against Insurers For Wrongful Hurricane Claims Conduct
Market conduct examinations of insurance company claims practices are important. Do you think that examiners are listening to the same repetitive complaints I hear from policyholders, contractors, roofers, public adjusters and other lawyers at the various seminars and trade shows I attend?…
Continue Reading Are Market Conduct Examiners Listening to Common Property Insurance Claims Complaints?
Merlin The Moose is a client favorite at the Chicago Merlin Law Group office. We won him at a charity auction last year. He also led me to some creative research uncovering a problem with market conduct studies and the transparency of property insurance claims procedures many insurers keep hidden from their customers and insurance regulators.
Continue Reading Property Insurance Claims Procedures Should Be Transparent and Uncovered in Market Conduct Studies
Departments of Insurance throughout the United States regularly conduct examinations of insurance company claim files. These are known as Market Conduct Examinations. The Claims Spot recently noted in 5 Claims Issues Cited for Non-compliance on Market Conduct Exams & 3 Tools to Avoid Them, recurrent wrongful claims practices by insurance companies since 2006 that are not being corrected by the insurance industry. Those highlighted wrongful practices were listed and then explained to be correctable with "basic" action:
1. Failure to acknowledge, pay or deny claims within specified time frames
2. Failure to pay claims properly (sales, tax, loss of use)
3. Improper documentation of claim files
4. Failure to communicate a delay in the settlement of claims in writing
5. Use of unlicensed claims adjusters or appraisers
All of these findings could have been avoided with enforcement of best practices and an internal review process. With some basic actions, a company can minimize or eliminate their risk of being out of compliance.