News Currents

TDI’s Selden explains department’s high tech, high touch approach

And tells a good news/bad news story along the way

Texas Department of Insurance Senior Associate Commis-sioner for Consumer Affairs Audrey Selden had a good news/bad news story for the insurance industry when she spoke at the Austin Insurance Day, sponsored in early March by the Austin Association of Insurance Profes-sionals and the Central Texas Chapter of CPCU.

The good news, Selden said, was that in the aftermath of Hurricanes Katrina and Rita, many in the industry went above and beyond the call of duty to offer immediate assistance to victims of both storms. In addition, the department is seeing fewer complaints on average against insurers than they’ve seen in previous years. The bad news is that TDI has had to chase down more than $12 million in Hurricane Rita-related claims money from carriers dragging their feet in returning to their insureds money they were owed.

Selden said that in general consumer complaints to the department have declined compared to the previous year. “On the average, we’re getting fewer and fewer complaints,” she said. “I think the reason for that is a better-educated consumer; they’re understanding what their policy does and what it doesn’t and they know who to contact at that insurance company to get the answer to questions that they need or how to actually get their claim process. Or that the insurance industry actually is performing better. . It’s a theory.”

However, her enthusiasm for the industry’s performance waned when she started looking at the number of complaints the department has received specifically related to Hurricane Rita. “I’m sad to report that we have exceeded the number of complaints that we had when we went through Tropical Storm Allison,” Selden said.

In a follow-up e-mail to Insurance Journal, Selden said the department “has received 1,600 complaints regarding Hurricane Rita and returned more than $12 million to consumers. The primary reasons for the disaster-related complaints are delays in claims handling, disputes regarding the amount of the claims settlement offers, and claim denials. Several carriers have more than 50 complaints filed against them.” Aiming for fairness, Selden reported the good side of the story regarding the industry. “In the initial response to Hurricane Katrina and Hurricane Rita, several industry representatives co-located with the Texas Department of Insur-ance at insurance assistance centers,” she said. “We provided direct one-on-one help to consumers. Many insurance representatives showed great compassion in assisting their policyholders and others in contacting insurance carriers. Their compassion was further demonstrated in providing office donations of clothing and food in addition to claim checks.”

High tech, high touch

Selden said the consumer protection program at TDI utilizes what she calls a high tech, high touch “approach to customer care excellence. The consumer protection program is made up of 77 of some of the hardest working people in state government, who answer a toll-free consumer helpline; they resolve individual consumer complaints; review certain advertisements about insurance products, particularly those that reference a senior product; and conduct outreach events to various consumer and industry groups. Our goal is to help educate consumers so that they only purchase the insurance products that they need, at a reasonable rate,” Selden explained.

She said the program resolved some 23,000 complaints that resulted in about $36 million being returned to consumers. It distributed more than three million publications, made about 550 presentations and reviewed around 650 advertisements, including insurance
carrier Web sites.

“So for those of you in the industry, we’re looking, we’re watching,” Selden said.

Noting there are more than 140 languages spoken in Texas, she added that the department is trying to communicate with consumers in many of those languages. “Some of the top languages spoken in Texas are English-and the Texas version of that-Spanish, Vietnamese, Chinese and German. This year we’ve contracted with several translators so that more and more of our consumer outreach publications and resource pages on our Web will be available in multiple languages,” she said.

The department is also using the Internet to reach not only consumers but to communicate with the insurance industry as well.

“We’re trying to push ourselves into the electronic world,” Selden said. “For at least three or four years now our complaints process has been paperless. However the consumer sends it to us, it’s immediately scanned; the file remains out there electronically. A couple of carriers have partnered with us to send us their responses totally electronically. We are interested in moving totally electronically in that regard.”

Disaster mode

Selden said the department is serious about its approach to disaster response, whether the disaster is weather related or something else, such as a pandemic, for instance. “We want to be there early, as soon as it’s safe to actually enter the devastated area and we want to partner with you,” she said.

TDI has for the past several years been surveying the entire industry, asking how prepared they are for a disaster. She said the department wants answers to questions like: Do you have a disaster plan? How would you handle a huge influx of claims? Will you import claims handlers and adjusters? What is your business continuity recovery plan?

“Remember during Tropical Storm Allison, especially in the Medical Center in Houston, some businesses just tanked out due to their systems, their infrastructure being right there and flooded,” she said.

With the goal of providing improved response in the wake of natural or other disasters, the insurance department is encouraging carriers to work with the Texas State Disaster Coalition, Selden said.

Topics Catastrophe Carriers Texas Hurricane Market