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California Department of Insurance CONSUMER SERVICES DIVISION AN OVERVIEW PRESENTED BY:

California Department of Insurance CONSUMER SERVICES DIVISION AN OVERVIEW PRESENTED BY:. JOEL LAUCHER Chief, Consumer Services Division DAVE STOLLS , CPCU, AIC Chief, Claims Services Bureau. CONSUMER SERVICES DIVISION: Organization. CONSUMER COMPLAINT HANDLING Claims Services Bureau

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California Department of Insurance CONSUMER SERVICES DIVISION AN OVERVIEW PRESENTED BY:

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  1. California Department of Insurance CONSUMER SERVICES DIVISIONAN OVERVIEW PRESENTED BY: • JOEL LAUCHER • Chief, Consumer Services Division • DAVE STOLLS, CPCU, AIC • Chief, Claims Services Bureau

  2. CONSUMER SERVICES DIVISION:Organization • CONSUMER COMPLAINT HANDLING • Claims Services Bureau • Rating & Underwriting Services Bureau • MARKET CONDUCT EXAMINATION • Market Conduct Bureau (Claims) • Field Rating & Underwriting Bureau

  3. RESPONDING TO CONSUMER INQUIRIES AND COMPLAINTS • Consumer Hotline (1-800-927-HELP) • Requests for Assistance • Response Within 10 Days

  4. CONSUMER COMPLAINT HANDLING: 3 PRIMARY RESPONSIBILITIES • EDUCATION • MEDIATION • ENFORCEMENT

  5. MOST FREQUENT VIOLATIONS Claims • Violations of Claims Settlement Practices Regulations and Statutes (CA Insurance Code § 790.03(h) and CA Code of Regs, Title 10, § 2695 et al) 1. 2695.5a - Responding to Dept. of Insurance Inquiries. 2. 2695.3 - Claim files containing all documents, notes and work papers.

  6. MOST FREQUENT VIOLATIONS (claims continued) 3. 2695.5b - 15 day response time to any communication from a claimant. 4. 2695.7b - accept or deny the claim within 40 days of receiving Proof of Claim. 5. 2695.7b3 - written notification that claimant may have denied claim reviewed by the Dept. of Insurance.

  7. MOST FREQUENT VIOLATIONS (claims continued) 6. 2695.7c1 - if additional time is needed written notice of reasons every 30 days. 7. CIC 790.03h5 - Not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims …..clear.

  8. MOST FREQUENT VIOLATIONS Rating & Underwriting • Producer Violations • CIC 481.5- Failure to refund premium within the mandated time frame (25 days). • CIC 1668j- “The producer has shown incompetency or untrustworthiness in the conduct of any business, or has by commission of a wrongful act or practice exposed the public to the danger of loss." Used for failure to place coverage.

  9. MOST FREQUENT VIOLATIONS(rating continued) • Insurance Company Violations Life Insurers • CCR 2694a3– Failure to following own rules or guidelines... • CCR 2694a5 - failure to respond to the consumer (or us) within the mandated 15 day time frame. P&C Insurers • CIC 1861.05a – “…no rate shall … remain in effect which is excessive, inadequate, or unfairly discriminatory….”

  10. WHAT HAPPENS NEXT??? • Issue is Resolved and • Consumer is Notified of Results or Options • Complaint is Determined to be Justified, a Question of Fact, or Other • Insurers are Notified of Justified Determinations and Violations • Enforcement Action?

  11. Types of Enforcement Actions • Admonishment Letter • Meeting with Insurer Management • Market Conduct Examination Request • Direct Enforcement Action by CSD • Legal Division Action (Including Notice of Non-Compliance, Order to Show Cause, Stipulation and Consent Order) • Formal Hearing • Monetary Penalties

  12. HOW TO AVOID OR MINIMIZE PROBLEMS • COMPLAINTS (DOI AND COMPANY) • DISCIPLINARY ACTIONS • BAD FAITH

  13. YOU NEED TO ……... • SELECTIVELY HIRE • TRAIN • ESTABLISH PROCEDURES • TRAIN • IMPLEMENT PROCEDURES • TRAIN • SUPERVISE • TRAIN BACK TO BASICS

  14. The Market Conduct Examination Process In California, separate market conduct exams are conducted of claims payment practices and of rating and underwriting practices (including advertising, pricing, and consumer selection activities). All regulated lines of business are reviewed.

  15. Types of Examinations • Routine Examinations • Re-Examinations • Targeted Examinations

  16. MARKET CONDUCT EXAMS: Focus of Exams • Fair and Consistent Treatment of Insurance Consumers • Compliance with California Insurance Code and Related Regulations and Case Law • Resolution of Unfair or Illegal Practices Discovered During the Examination Process or From Consumer Complaint Review

  17. Hot Topics in California Over time, with changes in technology and in the law, new issues come to the forefront of regulatory discussion. Right now, these issues include….

  18. CDI Website To get an overview of the entire California Department of Insurance, to review a listing of enforcement actions taken, or to obtain copies of current regulations, please visit the Department’s Internet Website at: www.insurance.ca.gov.

  19. ANY QUESTIONS…….? Don’t be afraid to ask. We will do our best to answer, that’s all we can promise…… Anyone, anyone?

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