N.Y. Legislator: Change Ahead For Insurers
By Daniel Hays
NU Online News Service, Nov. 8, 4:02 p.m. EDT?In the wake of New York's probe of insurance brokers, there will be big changes for all sections of the marketplace, a key New York legislator told a policyholder conference.
"Red flags are waving now over all lines of insurance?Expect significant structural changes in the industry," said Assemblyman Alexander "Pete" Grannis, D-Manhattan, speaking at a policyholder advisor conference sponsored by the Anderson Kill & Olick law firm.
Mr. Grannis' remarks last Friday on "Expectations for Insurance Companies" were in part a reaction to the civil action and investigation into alleged broker price fixing brought by New York Attorney General Eliot Spitzer.
Mr. Grannis said he was amazed by insurers' "creativity in earning the distrust of consumers" and "finding new ways to jerk consumers around."
Their methods, he said, included delays, denials of claims, failure to advise policyholders of rights, loss of documents, failure to retain documents and failure to return telephone calls.
He also castigated the industry for penalizing customers who made certain inquiries, leaving two-thirds of the homes in America underinsured, and eliminating guaranteed replacement-cost home policies.
In Mr. Grannis' view, insurers have and an undue focus on shareholders because of a perspective that views shareholders rather than policyholders as their customers.
Insurance legislation that Mr. Grannis has managed to get passed in the state's Democrat-controlled Assembly has frequently failed to move in the Republican-dominated Senate.
Referring to Senate refusal to make permanent the FAIR plan residual market pool for homes and businesses, Mr. Grannis said Republican Gov. George Pataki's administration had refused to intervene, saying it did not wish to take sides. He called it "a sorry abdication" of responsibility.
"Consumers expect their government to look after them. Consumers are shocked," he said. Mr. Grannis added that it was also no solace to consumers that insurance companies are examined by the state only once every three years.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.