Consumers Tell Regulators To Reveal More Insurer Details On Web Site

SAN DIEGO--Insurance department Web sites should gear consumer education efforts toward detailed information about individual insurer practices instead of providing only definitions of coverages, a consumer advocate told regulators.

Speaking at the consumer liaison forum at the National Association of Insurance Commissioners (NAIC) Spring Meeting, Daniel Schwarcz, a consumer representative from the University of Minnesota Law School, whose NAIC meeting attendance is funded by NAIC, said departments of insurance should provide information such as how well individual insurers pay their claims, how often they are sued, and how often judges and juries have found bad faith.

The only such information departments currently provide is complaints to state insurance departments, Mr. Schwarcz said.

He added most of the information given to consumers consists of, for example, explaining what insurance covers, or how much life insurance an individual should buy. While this type of information is useful, Mr. Schwarcz said, consumers also need to know how reliable the coverage they buy really is.

Gregory Squires, a consumer representative from George Washington University in Washington, D.C., said the NAIC should also look into how insurers treat consumers of difference races, stating that data shows there is a discrepancy in how people are treated based on their race.

Mr. Squires' comments drew a reaction from Connecticut-based consumer representative Sonja I. Larkin-Thorne, who worked in the insurance industry for over 30 years. She contended the issue should be about consumer education, not race, and she said every person of color who submits a claim does not get treated poorly. She added, "I have a problem with everything coming down to race."

Mr. Squires countered that just because everyone of color does not get treated poorly, it does not mean there is not a problem. He noted not everyone of color is discriminated against when they apply for a job, but that does not mean labor laws protecting minorities should be eliminated.