Yesterday’s blog, Insurance Company Internal Claims Management Documents Should Demonstrate Good Faith Claims Processes, lead to a number of private comments and questions by readers. As a follow up, I ask the question, Why Should Property Insurance Claims Handling Training Programs, Processes, and Incentives Be Secret?
Continue Reading Why Should Property Insurance Claims Handling Training Programs, Processes and Incentives Be Secret?

On December 13, 2011, The Huffington Post published an article all policyholders should read and heed. It is important to know how the insurance industry is making money by delaying claims and how it has shifted from a service industry to an industry that is driven by profit. It’s time for each state’s Department of Insurance to enforce their unfair business practice statutes on insurance carriers that profit by stalling and delaying the claims process to the detriment of the insured. The article is entitled, Insurance Claim Delays Deliver Massive Profits To Industry By Shorting Customers, and reports that since the mid-1990s, "a new profit-hungry model, combined with weak regulation, has upended that ancient social contract" between insurers and their customers.

Continue Reading Insurers Sacrifice Customers for Profit

It’s no secret that insurance companies are in business to make money, but the lengths some insurance companies go to in order to increase profits is alarming. In fact, dozens of posts on this blog have alerted our readers to the improper actions some insurance companies may take to put profit above their policyholders’ interests.

Continue Reading By Shorting Customers Insurers Make Massive Profits

In several of my older posts, I wrote about different ways some insurance companies have tried to make a profit by changing the way a claims handling department is operated. The following posts touched upon ways that claims handling employees can be compensated for meeting different types of goals set up by the insurer that, in effect, turn a claims handling department into a profit center: The Big Picture in Discovery of Insurer Claims Practices; Don’t Forget to Consider the Severity of Your Claim; Don’t Forget to Consider the Severity of Your Claim: Part II; Plaintiffs are Entitled to the Claims File in a Bad Faith Lawsuit. Some insurance companies also determined that they generally pay less on claims when the policyholder or victim is not represented by an attorney. As a result, it has become more appealing to an insurance company to resolve a claim with an unrepresented individual, and some carriers have spent money, time and energy implementing policies or procedures with the goal of dissuading policyholders or victims from hiring an attorney.

Continue Reading How and Why An Insurance Company Might Make Money By Dissuading Policyholders From Hiring an Attorney

National media articles have highlighted Ed Liddy’s appointment as the head of AIG during its unwinding.  His task is a large one.  A BestWeek article presents Liddy as a champion corporate strategist.  The article quoted one person as saying Liddy was extremely "ethical."  He may be, but my perception of Ed Liddy was shaped by his role in developing Core Claim Practice Redesign while at Allstate.  No customer or consumer advocate could call those claims practices as "ethical."  

Continue Reading Ed Liddy

The Florida First District Court of Appeal upheld the Florida Office of Insurance Regulation’s suspension of Allstate writing any new policies in an opinion issued last Friday.  Allstate had refused or was slow producing documents to the Department as it investigated Allstate’s role in duping Florida legislators and regulators into passing legislation which should have resulted in lower rates.  This was an important legal decision and the news media picked up on it right away. (Boston Globe; Tampa Tribune; Chicago Tribune) Within hours of the decision, Allstate placed over 150,000 previously "secret" documents regarding its claims practices on the Web Friday night.

Continue Reading Allstate Does the Right Thing

 The Tampa Tribune reported Friday that the Florida Department of Insurance is seeking McKinsey & Company consulting reports which are allegedly tied to an Allstate plan to underpay claimants.  These documents are at the heart of contention in a Colorado case where Allstate is being fined for not providing them, and also in a Missouri Department of Insurance investigation where Allstate is being fined $25,000 per day for refusing to cooperate with the state regulator’s investigation.  I am seeking similar documents in an Indiana case in which Allstate has been already sanctioned and ordered to provide them. For over a decade, I have criticized Allstate’s reliance on a claims program which appears to unethically calculate the value of an individual’s bodily injury claim and not honestly disclose how Allstate arrived at its determination.

Continue Reading States Seek McKinsey Reports