Ill. Consumers File Fewer Complaints Against Insurers in 2005

Illinois consumers filed fewer complaints regarding their insurance
companies and HMOs in 2005, according to consumer complaint statistics released recently by the Illinois Department of Financial and Professional Regulation (IDFPR), Division of Insurance.

Illinois HMOs experienced a decline in complaints in the year 2005, and reported 300,000 fewer enrolled Illinois residents. Even with 17 percent fewer Illinoisans being covered through HMO plans, health maintenance organizations experienced a decrease in the total complaints received directly at the health care plans by 25 percent, from 8,951 in 2004 to 6,666 in 2005. In comparison, the Division of Insurance closed 893 complaints regarding HMOs in 2005, a
decrease of 18 percent from the previous year.

Improvements were reported for both consumers utilizing HMO products and providers rendering care on behalf of the HMO. Of the 1.6 million Illinois members enrolled in HMOs, approximately 16 percent are covered through Medicare, Medicaid or other federal
programs. Federal laws generally pre-empt Illinois from handling complaint related issues for Medicare and Medicaid members; therefore, complaints related to those members are not
reflected in the complaint statistics. In addition to HMO complaints, other types of coverage have also experienced a decrease in
2005 from the prior year: individual life (-14 percent); individual accident and health (-14 percent); group credit accident and health (-29 percent); group accident and health (-15 percent); and, private passenger automobile (-13 percent).

For the second year in a row, complaints regarding homeowner
coverage decreased. Homeowner coverage complaints declined from 1,188 in 2004 to 876 in 2005, resulting in a 26 percent decrease.
In the past year there has been a rise in complaints regarding individual annuity coverage, from 108 complaints in 2004 to 119 in 2005, a 10 percent increase. Of the 119 individual annuity
complaints, 59 of them (50 percent) were regarding policyholder service issues.

Examples of Illinois Department of Financial and Professional RegulationDivision of Insurance NEWS policyholder service issues include cash value and surrender charge disputes and premium
notice or billing problems. In 2005, the division investigated 9,755 written complaints against insurance companies, compared to 11,107 in 2004; 11,762 in 2003; and 12,019 in 2002. This resulted in a 12 percent decrease during the past year, and an overall decrease of 19 percent since 2002.

For a copy of this report or to locate the online consumer complaint form, visit the IDFPR Website at www.idfpr.com, where the link to the Division of Insurance web page can be accessed.

Source: Illinois Department of Finance and Professional Regulation