New York State
Eric R. Dinallo Superintendent of Insurance 25 Beaver Street New York, N.Y. 10004
|ISSUED 04/07/2009||FOR IMMEDIATE RELEASE|
The New York State Insurance Department recovered $14.2 million for 3,164 consumers and health care providers from insurance companies between October 2008 and March 2009, Superintendent Eric Dinallo announced today. The payments resulted from Department investigations of complaints from consumers and health care providers.
“Hard working New Yorkers should feel reassured knowing that the State is doing what it can to ensure that they are protected from and treated fairly by the insurance industry. These are difficult times, and every dollar counts,” said Governor David A. Paterson. “I applaud Insurance Superintendent Eric Dinallo and the Insurance Department for their efforts to put more than $14 million back where it belongs – in the pockets of New York consumers.”
“Don’t give up because you think you have to face a big insurance company alone. We are here to help. New Yorkers who think their insurance company made a mistake or that they have been wrongly treated should call or write the Department,” said Dinallo. “I want to commend the men and women in our Consumer Services Bureau who work hard everyday and are extremely effective in helping consumers, including recovering $14 million for consumers in just six months.”
Cases where consumers recovered money from insurance companies include the following:
Life insurance: A 78-year-old man in ill health who was a company’s longstanding customer was persuaded by his insurance agent to sign documents switching matured fixed annuities into what he thought were new ones of the same type with the same company. Shortly after signing, he realized he had been switched into more risky variable annuities and was getting a lower return on his $140,000 than he could have gotten in other investments. However the company refused to cancel his contract and give him a refund. After the Department intervened, the company offered to return $143,006.77 to him.
Automobile: An 85-year-old grandmother was the victim of a hit-and-run on July 17, 2007. She quickly submitted a liability claim for bodily injury to her longtime insurer, but still had not received a check when she complained to the Department more than a year later in October 2008. The Department investigated, and as a result, the company issued a check for $245,000.00 on December 9, 2008.
Homeowners: A homeowner was the victim of a severe fire that caused extensive damage. The homeowner had replacement coverage, which meant the insurer would pay the actual cost of any necessary repairs. However, the repairs had to be completed in 180 days or the insurer could “hold back” a portion of the projected costs. Because of factors beyond the homeowner’s control, including the town’s being slow to issue the required building permit, she missed the deadline by a few days. The insurer would not grant her an extension and refused to pay her the $44,730.54 in “hold back” money. The Department investigated, directed the company to remit payment or to formally appear before the Department to explain. The insurance company decided to pay the $44,730.54 “hold back” money to the home owner.
Health: An infant was born prematurely and with a heart defect requiring lifesaving surgery. While the primary surgeon participated with the family’s health insurance plan, the assistant surgeon, called in by the primary surgeon, did not, and the plan provided no out-of-network coverage. The insurance company, which did not dispute the medical necessity of the services, denied the claim both initially and on appeal. The family received a bill for $3,600. The Department discussed with the company the fact that the member had no control over the situation. It was the surgeon, who was a participating provider, who enlisted the assistant surgeon’s services. After two letters and a phone conference with the company, the Department succeeded in convincing the insurer to provide coverage.
Consumers, including health care providers, who need help resolving problems with insurance companies can file a complaint with the Department. The Department handles about 60,000 complaints and 200,000 calls to its hotline annually. The Department investigates each complaint, and depending on the result of that investigation, the Department may direct the company involved to compensate the consumer.
Of the $14.2 million in compensation received in the last quarter of 2008 and first quarter of 2009, 18% ($2.59 million) went to consumers who complained about a property-casualty insurer, excluding automobile insurance. Complaints related to automobile/no-fault insurance resulted in 15% of the amount recovered ($2.18 million).
Fourteen percent of the amount recovered ($2.02 million) was from life insurance-related complaints. Eleven percent ($1.51 million) was due to health insurance-related consumer complaints. The remainder involved complaints from medical care providers and other categories, including Department investigations of sales and marketing of insurance products to seniors.
Consumers with insurance questions or concerns can call the Department’s consumer hotline at 1-800-342-3736. The hotline is open from 9 a.m. to 4:30 p.m. Monday through Friday. Consumers may also ask questions or file complaints at the Department’s website, www.ins.state.ny.us.
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