What
happens if you have a complaint
regarding your life insurance carrier,
plan, or broker or just want additional
support beyond what is offered by your
carrier? That's where the
Department of Life Insurance comes into
play. Let's take a look at how
this department functions and what
questions you can ask there.
First, it's important to understand that
the Department of Insurance and their
authority is administered State by
State. Each State will have it's
own Department of Insurance and
different rules/options apply. You
can quickly find your department by
typing in to Google, "Department of
Insurance" followed by your State.
The other point to notice is that all
insurance types are grouped together
under one heading. Each state
treats how these are broken out a
little differently but Health and Life
can generally be found under a separate
license (for the broker) and heading
from what is traditionally termed "P&C"
or Property and Casualty. The best
way to think of it is that one pertains
to insurance that applies to people
(health, life, long term care, etc),
while the other applies to insurance of
property or things (and the liability
that may result from them) such as car,
home, etc. Let's take a look at
what the Department of Insurance governs
as it pertains to life insurance.
The life insurance departments are
primarily geared around three key
functions. All are loosely tied to
protecting the consumer but in different
ways. The first deals with the
insurance carriers and their business in
the State. In effect, the
Department of Insurance acts as the
authority through which an insurance
carrier operates and markets insurance
in the State. Rate increase,
practices, marketing etc generally flow
under the auspices of the Department of
Insurance for that given State.
Depending on the depth of your State's
Department, you may find report cards on
how the carriers rate in comparison to
each other across different metrics such
as complaints, satisfaction, network
breadth, etc. This can be a handy
tool but as a life insurance broker, we
feel there's nothing better than dealing
with the carriers day in and day out to
know who is worth considering.
There are carriers we just won't deal
with even though they are in good
standing with the DOI due to their
history of being difficult to deal with.
Experience as a life insurance broker
with an unbiased approach can be your
greatest asset.
This brings us to our second function.
The Department of Insurance also acts as
the authority agent for licensing
insurance agents and brokers. They
dictate the requirements for obtaining
licenses, maintaining licenses
(including ethics and continuing
education requirements), and disputes or
complaints. You can look up the
status of a particular life insurance
agent from their website as well as
lodge a complaint. Since most
people purchase life insurance through
agents, this is an important check to
make sure consumers are getting the best
representation. The carrier
provide the insurance product but
ultimately, it's the agent that helps
guide them through the process of
finding the right plan and applying for
coverage...both of which are
multi-faceted and complex operations.
The final piece is tied into the first
two in that the core role of the
Department of Insurance is to be the
consumer's advocate. This is the
place to find information both general
and detailed about the market, file
complaints or request information
regarding carriers and agents, and learn
tips and insight into the very complex
world of insurance of all kinds.
There may be specific information on how
insurance carriers will treat swine flu
vaccinations or information pertaining
to new flood insurance requirements.
Each State's legislature is constantly
passing new laws and bills that govern
the way insurance functions in that
particular State. The Department
of Insurance is the main point of
dissemination for how these bills will
affect the residents of that State as it
pertains to insurance. There can
be general news alerts as to fraud or
scams affecting the insurance market.
There may even be specific information
for Seniors regarding Medigap insurance
(although a Federal program) or more
complex life insurance options such as
annuities and whole life.
The Department of Insurance is a
valuable resource to help protect
consumers and insure the proper
functioning of the insurance market in
each State. |