State investigating insurance
business practices    

Consumer toll-free line established

[NOV. 8, 2004]  The Illinois Department of Financial and Professional Regulation, Division of Insurance, announced last week that it is asking for help from Illinois consumers who have concerns about their business dealings with insurance brokerage firms. This information will be used in a widening investigation into the business practices of major insurance brokers, to determine whether company sales and commission practices are consistent with Illinois law.

"It is particularly troubling if working men and women are paying higher premiums for insurance policies or receiving less generous benefits than could be offered," said Deirdre K. Manna, acting director of the Division of Insurance. "We will ensure that all insurance consumers are treated fairly," she promised.

A statewide toll-free line has been established for consumers with concerns about their dealings with insurance brokers: 1 [phone]. For consumers with more detailed concerns, a complaint link is available at www.idfpr.com. This will allow customers of insurance brokers to provide confidential information to our investigators.

The following business practices are under investigation by the Division of Insurance: insurance companies paying commissions to brokers (in addition to the fees paid by companies seeking to purchase insurance) that may sway the broker's portrayal of a benefit package to its corporate customers; encouraging insurance companies to provide fake bids to its clients so that favored company policies are accepted as the best option; including insurance commissions in the premiums paid by employees who either pay part of the cost for company-provided benefits or purchase supplemental insurance options that may be offered as part of employee benefit packages.

"We encourage policyholders and risk managers to assess whether they have been subject to these types of practices and, if so, to contact our division," Manna urged. "Brokers and insurance companies that have been abusing the system for personal gain will be identified, and appropriate actions will be taken to see that all consumer concerns are addressed."

In a coordinated, multistate mission to address the issue aggressively, the Division of Insurance is taking a leadership role, along with members of the National Association of Insurance Commissioners. Manna will represent Illinois in a commissioner-level working group of the National Association of Insurance Commissioners to focus on preventing future abuses and protecting consumers at all levels.

[News release from the Illinois Department of Financial and Professional Regulation]