Consumers to benefit from insurance complaint agreement
States that will share complaints
District of Columbia
Nearly half the states in the U.S. will be sharing insurance complaint information, thanks to an agreement with the Office of the Comptroller of the Currency (OCC), which regulates nationally chartered banks and sets policy on what products those banks can offer to consumers, including insurance.
Consumers are expected to be the beneficiaries of the agreement, which will allow state and federal officials to share consumer complaints about insurance policies sold by banks. Insurance commissioners from 24 states and the District of Columbia have signed the agreement so far.
"It's a good, positive consumer development," says Kevin Mukri, a spokesperson for the OCC.
According to Mukri, the agreement came as a result of financial-services reform legislation that allows banks to sell insurance. While state insurance commissioners are charged with handling insurance company complaints from consumers, they are not allowed to interfere in bank activities. So, prior to the agreement, they could not help consumers who had purchased their insurance through a bank.
"If you are an insurance customer and you buy through a bank, this makes sure that complaints do not die," Murki says. "It allows that no consumer complaint falls through the cracks."
Under the agreement, state insurance departments will be able to forward information to the OCC, which would then contact the bank in an attempt to resolve the complaint. The OCC will also be able to forward complaint information to each consumer's respective state insurance department.
The deal is one that the OCC and the National Association of Insurance Commissioners (NAIC) came up with together.
"It is focused on making sure that consumers are treated appropriately," says NAIC president, and Kentucky Insurance Commissioner George Nichols III. "It's an agreement that I believe both the banking regulators and the NAIC feel good about."
|"Because of this agreement, we can work together on getting complaints resolved."|
Nichols says the agreement is part of an ongoing effort to strengthen communication between state and federal regulators. Ideally, both Nichols and Murki say, they would like to see all 50 states sign on to the agreement.
"Certainly someone who complains should be able to have that complaint addressed," Murki says.
As Nichols stressed, the bottom line is that the agreement will help consumers. "Because of this agreement, we can work together on getting complaints resolved," he says.