Consumer Protection in Private Health Insurance: The Role of Consumer Complaints. Introduction


The National Association of Insurance Commissioners (NAIC) was established in 1871 and is the peak association comprising insurance regulators from the 50 states, the District of Columbia and the four U.S. territories.

Since Spring 1998 the NAIC has been working on a Consumer Complaints White Paper concerning all lines of insurance. The Draft White Paper (Attachment 1, 13 March 2000) was adopted at the March 2000 meeting by relevant working groups and committees and it is expected that it will be formally adopted by the NAIC Executive in June 2000.

It is important to stress at the outset that while the initial charge by the NAIC to the Consumer Complaints Working Group included developing “recommendations for features of an effective complaint handling process”, the Draft White Paper does not generally invoke the language of recommendations. The NAIC states that “it is not the intent of the paper to prescribe a single methodology or procedure”. Hence, the paper is advisory in nature as reflected in much of the language with frequent reference to statements such as “the following best practices may be of assistance”.

The NAIC states that the paper “is intended as a resource guide for regulators”, identifying areas "where the preponderance of states have migrated to certain practices that appear to be efficient, effective and common between many states". In addition, the NAIC acknowledges the advantages of state regulation including that "each jurisdiction may establish laws and implement those laws in a ways that suit the expectations of the citizens of each jurisdiction" and the different budgetary and legal situations across states.

As occurs in many similar organizations, the NAIC Draft White Paper represents the result of compromise and negotiation to achieve a consensus position. While consideration was initially given to interviewing NAIC staff involved in the development of the Draft White Paper, it was later decided not to proceed with such interviews. The Draft White Paper represents the official position of the NAIC developed through a finely negotiated process and it would be unlikely for NAIC staff to offer views which differ substantially from the Draft White Paper.

The following analysis outlines the NAIC position, based on the Draft White Paper, on the broad issues examined in the state case studies, namely:

  1. Jurisdiction and responsibility for consumer complaint systems;
  2. Jurisdiction and liaison with health plans;
  3. Complaints reports;
  4. Public education activities; and
  5. Agency performance measures.