Insurance Industry California

Policyholders' complaints against insurance companies fell significantly last year, according to the California Department of Insurance's annual consumer complaint survey released Tuesday. The biggest drop was with auto insurance providers, where justified complaints dropped from 2,801 in 1992 to 1,564 last year among the state's 50 largest insurers. Ohio Indemnity Co.

Just how much is your insurance agent worth to you? That question is at the heart of a soon-to-be-decided legal battle between big insurance companies and a handful of California insurance agents who want to rebate their commissions openly. If the issue is ultimately decided in favor of the insurers, rebates could be much more difficult to find--eliminated by law or in practice.

The Supreme Court on Wednesday will take up the health insurance industry's challenge to what many experts laud as the most promising legal reform in health care: independent medical review of HMO disputes. In recent years, California and 41 other states have adopted laws that give patients a right to a second opinion if their HMO refuses to pay for a medical treatment.

Chris and Richard Clark are having a hard time getting homeowners insurance, and it's got nothing to do with living near an earthquake fault or a flood plain or a brush-fire zone. The problem is their dog, Cayanne, whose most threatening feature seems to be a tongue that slobbers on visitors. But the couple's homeowners insurance carrier has refused to renew their policy come April because Cayanne is a Doberman pinscher--a dog, the company said, that has "aggressive tendencies."

Facing a Monday deadline, insurance officials and regulators were scrambling Friday to muster financial, legal and operating support for a $1-billion industry bid for Executive Life Insurance Co. of California. Officials at the National Organization of Life and Health Guaranty Assns., the industry group making the bid, were meeting with attorneys and industry executives in a last-ditch effort to resolve unsettled issues that could scuttle the group's ability to buy Executive Life.

State Farm Insurance, the biggest seller of automobile policies in California with 15% of the market, announced Monday an action that would slap 20% higher rates on anyone in the state seeking new auto coverage from the company. The step drew immediate criticism from consumer groups, and the state insurance commissioner said she would challenge it.

Gov. Gray Davis signed into law a measure that compels insurance companies to replace children's car safety seats after any accident, even if a seat shows no sign of damage. The law is the first of its kind in the nation. In part, the law was designed to raise parents' awareness about the hidden hazards of used car seats, said Sen. Liz Figueroa (D-Fremont), who wrote the measure.

In the first such report in five years, Insurance Commissioner John Garamendi released statistics Tuesday ranking the state's top 50 insurance companies based on the number of justified consumer complaints filed against them last year. Saying his purpose was "to name names and give scores," Garamendi said the lists--ranking homeowner and auto insurers separately--reveal "the good, the bad and the ugly" companies as far as complaints are concerned.

The state Department of Insurance issued a notice of non-compliance Friday to four members of the Travelers Insurance group for refusing to renew private passenger auto policies in California. A number of insurance companies, since passage of Proposition 103 on the Nov. 8 ballot, have announced they will stop doing business in the state, contending they cannot profitably operate because of the initiative. Roxani M.

In 1996, Tom Lindner moved here from North Carolina. He was dying of AIDS and tens of thousands of dollars in debt. But he had friends in San Diego, and they knew a way to earn money fast. Call a certain insurance broker, they said. There's no trick to it. You only have to tell one lie. That lie was to tell life insurance companies he was healthy--allowing him to qualify for policies he could then sell for cash.

The Supreme Court on Wednesday will take up the health insurance industry's challenge to what many experts laud as the most promising legal reform in health care: independent medical review of HMO disputes. In recent years, California and 41 other states have adopted laws that give patients a right to a second opinion if their HMO refuses to pay for a medical treatment.

Accident-prone drivers be warned. California auto insurance rates are on the rise. And though rate hikes for so-called preferred drivers may be modest, rates for drivers with tickets and accidents are likely to soar. Insurers that were cutting rates in 1998 and 1999 are filing rate hike requests by the dozen, regulators said.

Following the trail blazed by State Farm Insurance Cos. and MetLife Inc., Allstate Corp. today became the latest insurer to open a bank, using its network of 2,000 California agents as a testing ground. Allstate Bank will offer checking accounts, certificates of deposit and mortgages through its California offices as well as nationwide via a Web site and a toll-free telephone number, said Kevin Slawin, the bank's chief executive. Northbrook, Ill.

California Insurance Commissioner Harry W. Low is turning up the heat on insurers to invest in low-income communities, citing poor participation in a voluntary program established by the industry five years ago to stave off legislation. In a letter to chief executives of 1,500 companies, he gave insurers until Wednesday to report back with annual goals that would bolster investments tracked by the California Organized Investment Network.

Five companies that cut millions of dollars in settlement deals with former state Insurance Commissioner Chuck Quackenbush have filed court papers trying to prove the agreements are legally binding--despite a lawsuit by the state attorney general intended to wipe them out. If the companies fail, they will face a fresh investigation into allegations that they low-balled hundreds and possibly thousands of people while paying damage claims linked to the 1994 Northridge earthquake.

A U.S. Supreme Court ruling that federal drug laws prohibit distribution of marijuana may be just what the doctor ordered for California insurance companies sick of paying claims on lost, stolen or confiscated pot. People legally using marijuana for medicinal purposes in California have been able to file claims with their insurance companies for payments when their pot was lost, stolen or confiscated by police.

When Dr. Marcy Zwelling-Aamot and her fellow physicians negotiate with health plans, she says, the two sides come armed entirely differently. "The health plans have an AK-47 and we have a sign that says, 'Please don't shoot me,' " said Zwelling, a solo practitioner from Los Alamitos and secretary of the Los Angeles County Medical Assn.

California is the most popular place for real estate investments by U.S. insurance companies, a study by the American Council of Life Insurers showed Tuesday. Of the $212 billion in commercial mortgages held by insurance companies, a major source of funding for real estate purchases, $35 billion were made on properties in California. Texas was second with $15 billion, followed by New York at $14 billion.

Blue Cross of California, in a radical departure from industry practice, is scrapping an incentive program in its HMO that rewards doctors for controlling medical costs. The insurer instead will link bonus payments directly to patient satisfaction--a stunning indication that the industry's oft-criticized focus on cost containment no longer works. Blue Cross, a unit of WellPoint Health Networks Inc. of Thousand Oaks, will announce the changes today.

Everyone agrees that California's Low-Cost Automobile Insurance program is a flop. What exactly to do about it is another matter. That was the verdict of a public hearing Thursday in Los Angeles, where representatives of the insurance industry, consumer groups and community organizations charged that the program's promotional campaign has failed to reach the public, and that the coverage it provides is substandard and too expensive.