The top three reasons consumers filed formal complaints against their insurance companies last year were process delays, claim denials and unsatisfactory settlement offers, according to regulators' data.

The National Association of Insurance Commissioners said those three complaints were followed by premium/insurance rating action and policy cancellations as the biggest customer gripes.

Types of coverage that drew the most complaints saw a virtual tie between accident and health and auto. The numbers varied little from 2007.

A total of 195,669 confirmed consumer complaints on insurance companies were reported to NAIC's centralized electronic Complaint Database System (CDS), through which states voluntarily report "closed" complaints.

The NAIC defines a closed complaint as one that has been investigated and resolved to the satisfaction of the state or jurisdiction in which it is filed.

NAIC does not collect all complaint data from all states and the organization said it would not release the names of states not included in the data. NAIC said by e-mail that it expects they will eventually provide the information. States represented in the data comprise 96.15 percent of the premium collected by the insurance industry in 2008.

States that have not reported have done so either due to technical or resource constraints, said NAIC.

CDS information from state insurance departments is continually updated, as new data is received from the states on an ongoing basis.

NAIC significantly expanded CDS in 1998 and it now houses data on more than two million complaints.

Aggregate data compiled from the CDS can be accessed on the NAIC's Web site through the Consumer Information Source. By accessing this program, consumers can obtain company-specific complaint ratios (the ratio of the company's market share of complaints compared to the company's market share of premiums for a specific policy type), as well as aggregate counts of complaints by state and by type of coverage for specific companies.

The NAIC said delays accounted for 19.1 percent of last year's complaints followed by denial of claim, 18.4 percent; unsatisfactory settlement/offer, 14.2 percent; premium and rating 4.7 percent; and cancellation 4 percent.

By type of coverage, accident and health accounted for 36.9 percent of complaints compared with 36.7 percent for auto, 11.8 percent for homeowners, 9.5 percent for life and annuity, and 1.9 percent for commercial multiperil.

The NAIC posts monthly trend reports that provide historical data about complaints by reason and type of insurance, as well as by how the complaints were resolved. The reports include:

o Most Common Complaints by Reason for Complaint, which provides a three-year trend regarding the reasons consumers file complaints.

o Most Common Complaints by Type of Insurance, providing the three-year trend as to which types of coverage receive a higher or lower number of complaints.

o Most Common Complaints by Disposition, giving the three-year trend regarding how complaints are ultimately resolved.

The percentages over the past three years have remained virtually unchanged. Claim delays, for example, accounted for 19.14 percent of complaints in 2008 and 19.99 percent in 2007.

Special Reports /

Figures Show Insurer Delays Are Consumers' Biggest Beef

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