YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

June 13, 2002

Report No. 2002-43

State agency adequately handles most citizen complaints on insurance companies; some improvements are needed in timeliness and completing case files  

The Department of Insurance sufficiently resolved most of the approximately 500 complaints received each month from citizens concerning insurance companies and agencies.� This audit focused on ways to improve the effectiveness of the consumer complaint process. 

Untimely actions caused unnecessary delays 

Of the 126 consumer complaints reviewed by auditors, 80 percent of the files were closed in an average of 33 days, which is under the department goal of 60 days.� However, auditors found 20 percent of the cases took 180 days to close, with only 2 of these cases having reasonable reasons for remaining open.� Untimely actions by specialists and follow up on inadequate responses from companies caused some delays.� Specialists said periodically excessive workloads contributed to these delays.� (See page 3) 

Better response needed from insurance companies 

Department officials closed 13 percent of the complaints reviewed before receiving adequate responses from insurance companies.� For five of these cases, department officials could have assessed penalties for the insufficient responses.� Some department staff told auditors it was not their place to question or audit a company�s response. (See page 4) 

Department's penalty is not effective  

Department officials said they did not always assess penalties because the hearing process was not cost effective and the $100 penalty did not have enough impact on the companies. Because raising the fine would require legislative change, department staff are considering alternatives, such as issuing subpoenas to companies, to ensure adequate responses are obtained. (See page 5) 

Supervisors do not review files before closure 

Supervisors do not review complaint files before they are closed, which could catch instances of closing a file before receiving an adequate response from an insurance company.� Instead, the specialist who handles the case can deem it closed.� In some cases, the work load is too high to expect review of all cases, but there are also no written guidelines to assure these complaints are resolved equitably.� (See page 4) 

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