Calif. Insurance Officials Recouped $54 Million for Consumers in 2011

Officials with the California Department of Insurance announced Wednesday they recovered more than $54 million for state residents in 2011 by following up on consumer complaints and overseeing the business practices of insurers.

California 2011 complaint statsThe department’s market conduct division, which examines coverage provider claims as well as marketing, rating and underwriting practices to insure they adhere to state laws and regulations, recouped about $5 million for consumers, officials said. The division reportedly carried out 114 examinations of coverage providers during the year.

The consumer services division got back more than $49 million through its handling of complaints regarding homeowner policies, the car insurance California motorists carry in order to protect themselves and stay in compliance with the state’s financial responsibility laws. The division maintains a hotline for state residents to call with complaints or inquiries about insurance matters that fields more than 200,000 calls a year.

“Protecting consumers is this department’s top priority,” Commissioner Dave Jones said in a news release in which he credited the hard work of staff members with delivering benefits to Californians they might otherwise not have received. “Our consumer complaint services and market conduct exams are important tools that we employ to respond to the needs of consumers and proactively go after any activities that pose a threat to policyholders.”

Regulators in California and other states are charged with a broad range of responsibilities, including ensuring that consumers are treated fairly by insurers, regulating the business dealing of those companies and imposing penalties for legal violations, as well as making sure that coverage providers remain solvent.

Industry experts say Jones’ department is able to do a particularly good job of carrying out those tasks because of strong consumer protection laws in the state.

Proposition 103, which was enacted in 1988 partly in response to skyrocketing premiums statewide, implemented a wide array of regulatory restrictions on insurers, including the requirements that rate increases for vehicle coverage be approved by state regulators.

The law also mandated that insurers based premiums on a range of factors, foremost among them being a motorist’s driving record and amount of experience behind the wheel.

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

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