Garamendi Ranks Health, Life Insurers by Complaints Filed
Insurance Commissioner John Garamendi took on some of the state’s top insurance companies for the second day in a row Wednesday, ranking health and life insurers by the number of justified complaints filed against them last year.
Just as he had done Tuesday, when he released similar reports on the biggest 50 auto and homeowner insurance sellers, Garamendi had harsh words for large firms with the highest complaint rates.
He took special note of Metropolitan Life Insurance Co. The third-largest seller of life insurance in California, it had the ninth-highest complaint ratio for both life and health insurers.
“Get Met?” Garamendi asked rhetorically.
“If they don’t improve their consumer service, Californians will simply say ‘nyet’ to Met,” he said.
A spokesman for Metropolitan, Charles Sahner, responded that the company believes Garamendi’s report “shows our record in a worse light than it really is.”
He said the Insurance Department traditionally has included a category of complaints that should have been excluded. Business doubled in that category in 1990, leading to a greater distortion this time, he said.
“Less than one-third of 1% of the millions of claims we pay each year result in a complaint,” Sahner said. “MetLife is continually monitoring the quality of its service, to make sure it meets our high standards. Since our volume doubled last year, obviously, more Californians are getting Met because they know it pays.”
Garamendi’s press secretary, Bill Schulz, said later the commissioner remains confident the reports are fair.
“I’ve said it before and I’ll say it again--we’re going to give consumers the information they need to obtain the best insurance buy available,” Garamendi said at Wednesday’s Sacramento news conference.
The commissioner has defined a justified complaint as one involving a violation of the state Insurance Code or reflecting an instance in which the consumer could not get a company response to questions and had to contact the Insurance Department for help.
Garamendi said the department had received 1,197 justified life insurance complaints in 1990 and 2,804 justified health insurance complaints.
In health insurance, he said, Pioneer Life of Illinois “was by a wide margin the rock-bottom worst company,” with more than three justified complaints per million dollars of premiums collected--almost 15 times the average rate.
Pioneer spokeswoman Nancy L. Zalud said the company has established a toll-free customer service line for California policyholders, opened a service office in California and increased correspondence with policyholders, all in an attempt to improve satisfaction with its service.
Other health insurers making up a “gruesome foursome,” Garamendi said, were Transport, Great Republic and American Western.
A Transport vice president, Betty de Largy, said Transport had been selling a kind of hospitalization insurance that “produced a high volume of complaints.” The company quit selling that kind of coverage in February and expects its complaint record to improve.
By contrast, Garamendi noted, no justified complaints were issued against one health insurer--PM Group Life Insurance.
In life insurance, Garamendi said two companies seized by his department this year because of their poor financial condition--Executive Life and First Capital--ranked third- and fourth-worst in justified complaints.
“In addition to rehabilitating these companies financially, I want to see their poor record of service to policyholders turned around,” he said.
However, the commissioner said, the “really bad news company” in life insurance was United Insurance of America.
“As far and away the worst company in the survey . . . the company that’s ‘there when you need us’ clearly hasn’t been living up to its motto,” Garamendi said.
Company attorney Tom Maloney declined comment, saying officials had not seen the report.
Five life insurers had not had a single justified complaint filed against them in 1990, Garamendi said. They were Crown, Phoenix Mutual, Aid Assn. for Lutherans, Standard and Security Life of Denver.
He said that Prudential, the largest seller of life insurance in California, and Metropolitan Life got “honorable bad mentions” in the life insurance category, both ranking among the bottom 10 companies.
“As industry leaders, I expect them to lead in good service to consumers as well,” he said.
A spokesman for Prudential noted that one of that company’s subsidiaries, Pruco, ranked among the 10 companies with the fewest complaints per million dollars in premiums sold, and that in health, Prudential was close to the top third of companies with the least complaints.
As for the low rankings in life insurance for the main Prudential company, spokesman Scott Peterson said, “We’re a little bit puzzled, basically because our company places a very high priority on providing quality service. . . .
“It’s important to note that the department got 94 complaints, but nearly 500,000 California households have life insurance with us. So only 0.002% are complaining. It sounds like a pretty small complaint ratio to me.”
Complaints Against Insurers
Insurance Commissioner John Garamendi has made public these comparative listings of justified complaints received by the state Department of Insurance in 1990 against the top 50 California sellers of health and life insurance. Companies highest on these lists, with the smallest ratios, had the fewest complaints for each million dollars of premiums collected. Those lowest on the lists had, comparatively, the highest number of complaints for the premiums collected. The 50 companies listed on the respective charts do 80.9% of the health insurance business in the state and 66.8% of the life insurance business.Parent companies are in parenthesis.
50 LARGEST HEALTH AND DISABILITY INSURERS
1990 1990 1989 Complaints Number of Premium per $1 Million Justified Volume Company in Premiums Complaints (in Millions $) 1 PM Group Life 0 0 61.349 Ins. Co 2 Union Labor Life .02 2 97.889 3 State Farm .024 2 83.253 Mutual Auto. 4 Amex Life Assurance .035 3 85.262 5 Hartford Accident .051 2 38.758 & Indemn. 6 Massachusetts .054 7 129.393 Mutual Life 7 American General .055 3 54.37 Grp. Ins. 8 Provident Life .058 14 238.234 and Accident 9 Unum Life .061 6 97.385 of America 10 United of .076 5 63.318 Omaha Life 11 Continental .08 10 124.709 Assurance 12 Paul Revere Life .086 5 57.952 13 Life Ins. of .093 5 53.32 North America 14 Equitable Life .090 12 124.075 Assur. Society 15 Mutual .098 6 60.976 Benefit Life 16 Healthnet* .099 71 711.549 17 Principal .105 33 311.975 Mutual Life 18 Prudential Ins. .12 86 715.37 of America 19 Standard Ins. .121 9 73.859 20 United American .137 11 80.217 Ins. 21 Crown Life .148 6 40.365 22 John Hancock .154 14 90.896 Mutual Life 23 Blue Cross .161 296 1835.45 of Calif. 24 Allstate Life .165 8 48.444 25 Calfarm Life .17 7 40.977 26 Guardian Life .174 17 97.478 of America 27 United Ins. .181 7 38.554 of America 28 AETNA Life .186 76 407.025 Ins. Co. 29 Northwestern .204 9 43.99 Nat’l Life 30 Travelers Ins. .206 46 222.727 31 Western Life .208 10 48.028 32 Mutual Life of New York (MONY Reinsurance) .222 12 53.965 33 New York Life .228 34 148.986 34 John Alden Life .269 26 98.315 35 Employers .275 31 112.719 Health Ins. 36 Pacific .275 32 116.071 Mutual Life 37 Great-West .301 16 52.996 Life Assur. 38 Connecticut .326 47 144.028 General Life 39 Health Plan .341 33 96.735 of America* 40 Lincoln Nat’l Life .369 54 148.612 41 General .382 16 41.845 American Life 42 Metropol. Life .413 49 118.572 Ins. Co. 43 Mutual of .586 35 59.699 Omaha Ins. 44 NN Investors .592 40 67.544 Life Inc. 45 Congress Life .602 29 48.111 46 Bankers United .65 28 43.031 Life Assur. 47 American 1.208 53 43.838 Western Life 48 Great Republic Ins. 1.499 161 107.378 49 Transport Life 2.011 80 39.774 50 Pioneer Life 3.162 138 43.642 of Illinois
Company Rank by Company Sales 1 PM Group Life 31 Ins. Co 2 Union Labor Life 19 3 State Farm 25 Mutual Auto. 4 Amex Life Assurance 24 5 Hartford Accident 49 & Indemn. 6 Massachusetts 11 Mutual Life 7 American General 34 Grp. Ins. 8 Provident Life 6 and Accident 9 Unum Life 20 of America 10 United of 29 Omaha Life 11 Continental 12 Assurance 12 Paul Revere Life 33 13 Life Ins. of 35 North America 14 Equitable Life 13 Assur. Society 15 Mutual 30 Benefit Life 16 Healthnet* 3 17 Principal 5 Mutual Life 18 Prudential Ins. 2 of America 19 Standard Ins. 27 20 United American 26 Ins. 21 Crown Life 47 22 John Hancock 23 Mutual Life 23 Blue Cross 1 of Calif. 24 Allstate Life 38 25 Calfarm Life 46 26 Guardian Life 18 of America 27 United Ins. 50 of America 28 AETNA Life 4 Ins. Co. 29 Northwestern 42 Nat’l Life 30 Travelers Ins. 7 31 Western Life 40 32 Mutual Life of New York (MONY Reinsurance) 35 33 New York Life 9 34 John Alden Life 22 35 Employers 16 Health Ins. 36 Pacific 15 Mutual Life 37 Great-West 37 Life Assur. 38 Connecticut 10 General Life 39 Health Plan 21 of America* 40 Lincoln Nat’l Life 8 41 General 45 American Life 42 Metropol. Life 14 Ins. Co. 43 Mutual of 32 Omaha Ins. 44 NN Investors 28 Life Inc. 45 Congress Life 39 46 Bankers United 43 Life Assur. 47 American 41 Western Life 48 Great Republic Ins. 17 49 Transport Life 48 50 Pioneer Life 44 of Illinois
* Under jurisdiction of the Dept. of Corporations
50 LARGEST LIFE INSURERS
1990 1990 1989 Complaints Number of Premium per $1 Million Justified Volume Company in Premiums Complaints (in Millions $) 1 Crown Life 0 0 36.622 2 Phoenix 0 0 38.694 Mutual Life 3 Aid Assoc. 0 0 46.143 For Lutherans 4 Standard Ins. 0 0 46.14 5 Security Life 0 0 49.132 of Denver 6 Massachusetts .009 1 104.894 Mutual Life 7 Connecticut .012 1 80.349 Mutual Life 8 Northwestern .012 2 154.408 Mutual Life 9 Mutual Benefit Life .014 1 67.22 10 PRUCO Life (Prudential Ins. of America) .014 1 69.945 11 Lutheran .026 1 37.793 Brotherhood 12 Great-West .027 1 36.548 Life Assur. 13 Pacific Mutual Life .029 4 137.592 14 American General .03 1 32.385 Group of CA. 15 Manufacturers Life .032 5 152.415 16 Connecticut .035 4 112.951 General Life 17 Principal .038 3 77.155 Mutual Life 18 Minnesota .043 2 46.239 Mutual Life 19 Massachusetts .046 2 43.057 General Life 20 Equitable .047 4 83.816 Variable Life 21 Metropol. Ins. .052 2 38.451 & Annuity 22 Farmers New .052 4 76.394 World Life 23 Lincoln Nat’l Life .053 2 37.219 24 State Farm Life .057 7 122.045 25 Alex. Hamilton .059 4 67.749 Life of America 26 General .063 4 62.67 American Life 27 Northwestern .076 3 39.325 Nat’l Life 28 Independ. Order .078 3 38.032 of Foresters 29 Travelers Ins. .078 4 50.96 30 Transamerica .084 14 165.113 Occidental Life 31 First Colony Life .088 3 33.896 32 New York Life .089 33 368.814 33 Provident Life .091 4 43.825 and Accid. 34 New England .092 5 53.783 Mutual Life 35 Equitable Life .099 11 110.215 Assur. Society 36 Guardian Life .103 5 48.129 of America 37 New York Life .112 5 44.498 Ins. & Annuity 38 AETNA Life Ins. Co. .112 11 98.135 39 Sovereign Life .122 4 32.606 40 Allstate Life .125 8 63.89 41 Jackson Nat’l Life .143 17 118.242 42 Metropol. Life .144 38 263.727 Ins. Co. 43 Prudential Ins. .227 94 413.889 of America 44 Mutual Life of New York (MONY Reinsurance) .243 11 45.218 45 Massachusetts .246 35 141.959 Indem. & Life 46 John Hancock .255 23 90.169 Mutual Life 47 First Capital Life* .308 11 35.602 48 Executive Life* .343 57 166.047 49 American Nat’l Ins. .567 27 47.606 50 United Ins. .991 34 34.308 of America
Company Rank by Company Sales 1 Crown Life 44 2 Phoenix 39 Mutual Life 3 Aid Assoc. 33 For Lutherans 4 Standard Ins. 32 5 Security Life 28 of Denver 6 Massachusetts 14 Mutual Life 7 Connecticut 18 Mutual Life 8 Northwestern 6 Mutual Life 9 Mutual Benefit Life 23 10 PRUCO Life (Prudential Ins. of America) 21 11 Lutheran 42 Brotherhood 12 Great-West 45 Life Assur. 13 Pacific Mutual Life 9 14 American General 50 Group of CA. 15 Manufacturers Life 7 16 Connecticut 12 General Life 17 Principal 19 Mutual Life 18 Minnesota 31 Mutual Life 19 Massachusetts 37 General Life 20 Equitable 17 Variable Life 21 Metropol. Ins. 41 & Annuity 22 Farmers New 20 World Life 23 Lincoln Nat’l Life 49 24 State Farm Life 10 25 Alex. Hamilton 22 Life of America 26 General 25 American Life 27 Northwestern 38 Nat’l Life 28 Independ. Order 40 of Foresters 29 Travelers Ins. 27 30 Transamerica 5 Occidental Life 31 First Colony Life 48 32 New York Life 2 33 Provident Life 36 and Accid. 34 New England 26 Mutual Life 35 Equitable Life 13 Assur. Society 36 Guardian Life 29 of America 37 New York Life 35 Ins. & Annuity 38 AETNA Life Ins. Co. 15 39 Sovereign Life 49 40 Allstate Life 24 41 Jackson Nat’l Life 11 42 Metropol. Life 3 Ins. Co. 43 Prudential Ins. 1 of America 44 Mutual Life of New York (MONY Reinsurance) 34 45 Massachusetts 8 Indem. & Life 46 John Hancock 16 Mutual Life 47 First Capital Life* 46 48 Executive Life* 4 49 American Nat’l Ins. 30 50 United Ins. 47 of America
* In conservation.
SOURCE: Statistical Analysis Bureau, California Department of Insurance.
