Action Urged on Mounting Backlog of Insurance Complaints

The state Insurance Department has a mounting backlog of public complaints, as long as 5 1/2 months in some types of cases, and ought to be directed to take steps to reduce it, according to a report by the state legislative analyst’s office.

The report, prepared by program analyst Michael Reyna, also recommends that the Legislature enact statutes requiring the department to submit quarterly figures on the size of its backlogs.

In response, the Insurance Department’s consumer affairs chief, Everett Brookhart, said Friday that since the Reyna report was prepared, there has already been progress at reducing the backlog.

“His analysis goes through February of this year,” Brookhart said. “Two of the three bureaus are already making headway in reducing backlogs. There is better organization, some staff additions, increased productivity and new management. His analysis is correct historically, but we have been improving since.”

Complaints Tripled

Reyna’s report found that at the end of February the department was 4 1/2 months behind in handling complaints charging that insurance companies have failed to renew a policy without just cause or have failed to return premiums due the consumer after a policy has been canceled. This was up from a 2 1/2-month backlog two years ago. Such complaints more than tripled on a monthly basis--from 786 to 2,431--in the 20-month period beginning in July, 1984.

There was a 5 1/2-month backlog of complaints regarding the rates charged for insurance, the report said. The complaints on a monthly basis in this category went up by 192% over the 20-month period, from 105 in the beginning to 307 at the end.

“Our analysis indicates that several of the bureaus within the (department’s consumer affairs) division have increasing backlogs of pending complaint cases,” Reyna said. “Hence, we question whether the bureaus are as effective as they should be in providing program services to the public.”

Failed to File 41 Reports

The legislative analyst’s report also found that in the past five years another division of the department has failed to file 41 reports of overall financial examinations it has conducted of various companies--about 8% of the total.

“The growing backlog indicates that the division is not timely and effective in securing responses from the insurance companies and filing completed financial reports for public examination,” Reyna said.

Last January, for the first time, the Insurance Department issued a list showing the comparative complaint ratios of all automobile insurance companies doing business in the state against which three or more complaints had been found to be justified during 1984.

At that time, the department backlogs precluded an early report for 1985, and none has yet been made.