When his insurer demanded more money on a homeowner's policy he had already paid for, Harry M. Trebing turned to the Maryland Insurance Administration. Soon the Baltimore County resident was fighting not only the company but also the state agency he had hoped would help.
The insurance administration sided with the company. But it reversed itself last year - after the little-known office of the People's Insurance Counsel intervened.
Since opening two years ago, the office has been an independent advocate for consumers and a lightning rod for criticism of the insurance administration's handling of the roughly 16,000 complaints a year it receives.
Ilene Nathan, who was insurance counsel until recently, said many consumers "really feel they are not heard fully and the investigator listened to just what the insurer said."
But the counsel has a small staff, and its authority to help consumers who feel slighted by Maryland's insurance administration is limited to homeowners' and medical professional liability insurance. While the administration strongly defends its performance, it cannot say what percentage of consumers' complaints are upheld or denied.
By contrast, some other states offer the public more data on complaints and have insurance counsels with greater power to help consumers.
On the Web site of the Texas Department of Insurance, for example, consumers can track the number and type of complaints received on a quarterly basis and see how many were deemed "justified" and "unjustified."
Rhode Island's insurance advocate says she can tackle any type of insurance complaint because "the idea is to level the playing field between the insurance companies and the consumer."
Nathan said consumer criticism of how the Maryland Insurance Administration might prompt the agency to examine how it handles complaints, including whether to use an "in-house ombudsman" to review them, and study whether enough receive legal review.
State Insurance Commissioner Ralph S. Tyler says the MIA does a good job holding companies to the law, recovers millions of dollars for policyholders by reviewing insurers' practices and uses a "rapid response" program to try to resolve some complaints quickly.
"The consumer is not equal in the bargaining position with the insurance company," Tyler said. "So our function is to provide some balance to the relationship."
Hard to judge
But it's almost impossible to evaluate how complaints are resolved by the MIA, which has primary responsibility for protecting consumers.
In its annual reports, the insurance administration breaks down the disposition of complaints into dozens of categories, each accompanied by a code requested by the National Association of Insurance Commissioners.
"Is it useful, these types of numbers? Probably not," said Howard Max, the MIA's associate commissioner for life and health insurance, who added that the NAIC is trying to simplify the codes.
The MIA says publishing a report card on how it resolves complaints would be a daunting task that would serve no purpose. Because the agency does not maintain the huge number of complaint files electronically, it is impractical for an outsider to analyze the MIA's practices.
"Whether the insurance commissioner does his job well, nobody knows," said Steve Hannan, executive director of the Maryland Consumer Rights Coalition.
Until the office of People's Insurance Counsel was created, no one could effectively challenge the MIA's complaint investigations without filing an administrative appeal or suing in court. But the office has too few people and too little authority to be more than a bit player in conflicts between consumers and companies.
The insurance counsel is part of the Attorney General's Office and modeled after the People's Counsel that pursues utility issues in Maryland; it's funded through assessments on insurers. Originally staffed with four people, it's down to two today because Nathan resigned last month to take a different job with the attorney general and another employee quit in 2006 and was not replaced.
Senate President Thomas V. Mike Miller, who was the driving force behind creating the People's Insurance Counsel, applauds its work but said it's too soon to recommend a larger role.
The office was set up at a time of concern over hurricane damage claims and availability of medical malpractice coverage. The counsel's authority is limited to making recommendations to the MIA, which has the final say.
"Insurance companies are responsive to their shareholders," Miller said. "They are responsive to their executives. They take a hard-nosed position time after time after time when people go to them with a concern and a complaint. There really is nobody on the other side advocating on behalf of the little person."
Attorney General Douglas F. Gansler said he expects Nathan will be replaced "in short order."
He also said the counsel possibly should be expanded to scrutinize what happens to all health insurance complaints, not just liability issues for medical professionals.
Lenora "Terry" Stevenson, who lives in Arnold, turned to the insurance counsel in the midst of a battle in 2006 that had her fighting an insurer and the MIA.
She ran a day care business in her home and wanted to be sure her homeowner's policy - which included a rider for that business - would remain in force if she temporarily took in a third beagle as a pet. Erie Insurance Exchange wouldn't provide coverage when there are dogs, a possible threat to children, and informed Stevenson it would cancel her policy.
The MIA denied her complaint, and she appealed, with support from the insurance counsel. But when the company and the MIA asked for potentially hundreds of pages of documents, Stevenson gave up. "I guess there is not any recourse for people who are unable to hire their own attorneys," she wrote in a letter to the MIA.
Without Stevenson's involvement, the MIA ruled that the insurance counsel didn't have authority to press the issue.
In the shadows
The insurance counsel reviews letters that MIA investigators send to medical professionals or to homeowners once decisions are made on their complaints. The counsel also fields e-mails and calls from consumers, but not many know the office exists because it's publicized only on the attorney general's Web site and at the Maryland State Fair.
"It's unfortunately been a squeaky-wheel process even here," Nathan said.
The office also reviews insurers' rate filings. Nathan said a big chunk of time was spent advocating for consumers who challenged Allstate Insurance Co.'s decision to stop writing new homeowner policies in certain coastal areas. Last February, Tyler cleared Allstate of any wrongdoing.
According to its annual reports, the insurance counsel opened 30 cases after reviewing 531 MIA letters to homeowners and medical professionals from 2005 to 2007. Those cases led to victories for consumers, including a 2006 order from the MIA to an insurer to offer reinstatement to 45 policyholders who had lost coverage because they did some farming on their land.
In 72 percent of the 531 cases, the people's counsel calculated, the MIA found no violation of the state insurance code. In the remainder, the insurer either changed its position or the policyholder withdrew the complaint, or the issue became moot because the consumer purchased other insurance.
In eight instances - about 1 percent - the MIA found that the insurer had violated the law.
Tyler praises the MIA's track record for "timeliness" in handling complaints. The administration says 95 percent of life, health and homeowners' complaints are resolved within 90 days, but it did not provide data on how that figure was calculated.
Roger D. Lamb of Cecil County says his case has gone unresolved for nearly two years.
Lamb complained to Nathan in 2006, saying Montgomery Mutual Insurance Co. had increased the replacement value of his Rising Sun home, which led to a tripling of his premium to about $1,300. Nathan forwarded Lamb's complaint to the MIA in June 2006.
But neither knows the precise status of the complaint after 21 months. The MIA says that, under state law, it can't discuss its findings until a decision is made. Montgomery declined to comment on his case but said that the MIA has handled the investigation properly.
To support its view that consumers are treated fairly, the agency released a sample of complaints: Michael Barrett filed a protest when Allstate tried to increase his premium last year. The MIA sided with him and ordered Allstate to refund $117, saying the company's notice of a premium increase violated state insurance law.
"The response was timely," said Barrett, a Lanham attorney.
The American Insurance Industry, a trade group of property and casualty insurers, says it considers Maryland "one of the most aggressive departments" in handling consumer complaints, along with Florida, California and Washington state.
"They err on the side of the consumer, to the chagrin of the industry. We are guilty until proven innocent with them," said Tammy Velasquez, the group's vice president and director of state affairs. She said she has not examined MIA data on complaints.
Tyler said the MIA doesn't tabulate precise data on complaint resolutions because the cases "raise more than one issue and the disposition is not as clean-cut as 'you win and I lose.' You could have a case with three issues and two dispositions."
Data in other states
The agency that regulates insurers in Virginia has monthly statistics on complaints resolved "to the consumer's benefit" and those that are not. The New York State Insurance Department tracks how each complaint is resolved. Other states, including Texas and Rhode Island, also have consumer advocates in state government with greater authority.
Tyler, appointed insurance commissioner in 2007 by Gov. Martin O'Malley, a Democrat, said the legislature authorized creation of the counsel office in 2004 because of "the view that this agency wasn't doing an adequate job of representing consumers, whether that was fair or not."
"They have reviewed complaints that come in and identify instances where they think there is something to it that they think we have not handled appropriately," he said of the people's counsel. "It is not a large number of cases."
R. Steven Orr, an insurance commissioner appointed by former Republican Gov. Robert L. Ehrlich Jr., said the office is not needed because it's "duplicative."
"A lot of resources are going into looking over the MIA's shoulders without anything positive coming out of it," he said.
Susan Cohen, an assistant attorney general in the insurance counsel's office, defends its role: "You can't assume that group of [MIA] investigators will get it 100 percent right; that is the attitude MIA has, but they can't."
Harry Trebing, who complained because he felt his homeowner's insurance company had improperly increased coverage limits and his bill, credits the insurance counsel with helping him challenge the MIA.
"My fear is I bet you in 90 percent of the cases people say, 'What the devil,' and don't fight the insurance companies," said Trebing, a former Michigan State University economics professor. "The insurance counsel understood the problem, took the initiative and represented the consumer."
Where to turn
On insurance issues consumers can contact:
The Maryland Insurance Administration to complain about insurance problems: online at www.mdinsurance.state.md.us, by downloading forms on the MIA's Web site and then submitting them by fax or e-mail, or by submitting a letter to: Maryland Insurance Administration, Attention: Consumer Complaint Investigation (indicate whether complaint is regarding life/health or property/casualty insurance), 525 St. Paul Place, Baltimore, MD 21202-2272. Phone: 410-468-2000 or 1-800-492-6116.
The Attorney General's Health Care Education and Advocacy Unit to receive assistance in filing appeals to a health maintenance organization or health insurer that denies coverage for treatment. Call toll-free at 1-877-261-8807.
The People's Insurance Counsel Division of the Attorney General's Office for help with complaints to the MIA about homeowners insurance coverage. Medical professionals also can receive help with professional liability insurance coverage. Phone: 410-576-6432; toll-free, 1-888-743-0023. E-mail: PIC@oag.state.md.
The National Association of Insurance Commissioners to search for information about insurance companies, online at http:--www.naic.org/consumer_home.htm
[Sources: Maryland Insurance Administration, Attorney General's Office, People's Insurance Counsel Division]