Missouri Insurance Lawyer Blog

Insurers in Missouri to issue an estimated $64.5 million in rebates

Mon, 14 May 2012 14:33:49 -0600

A recent report states Missouri businesses and consumers are slated for an estimated $64.5 million in rebates this year from health insurers. These insurers spent more on administrative expenses and profits than allowed under the 2010 health care overhaul. According to the Kaiser Family Foundation, Insurers have told the state they expect to owe rebates covering 654,909 Missourians.

Kaiser President and CEO Drew Altman says, "This study shows that asking insurance companies to put more of their premium dollar towards patient care rather than administration and profits is not only popular but also effective." There are tangible benefits for consumers and employers."

An industry group, America's Health Insurance Plans, said that "coverage disruptions and other unintended consequences" of the new spending requirement will outweigh any benefits to consumers. The group also said other parts of the law will cause premiums to rise more than the required rebates will lower them.

Advocacy group, Health Care for America Now, deemed the spending rule a victory for consumers. "For far too long, health insurance companies have been ripping off consumers, and Obamacare finally put a stop to that," said Ethan Rome, executive director.

The Affordable Care Act sets a requirement for insurers that sell individual plans, or plans to small groups, to spend at least 80 percent of the premiums they collect on medical care instead of on profits, marketing or other administrative costs. Insurance plans sold to large groups have to spend at least 85 percent of premiums on medical care.

Insurers that fall short of those guidelines for 2011 must issue rebates to consumers by August. The law allowed states to request the government to waive the rule for individual plans if they could show that the 80 percent requirement would be too burdensome. Of the seven states which received waivers to lessen the requirement, Missouri was not among them.

Read more here.

Consumer Complaints yield additional $2.2 million in claim payments

Mon, 07 May 2012 15:06:53 -0600

The Missouri Department of Insurance received more than 10,000 consumer complaints and inquiries this year compared to nearly 7,500 at the same time in 2011. The most common reasons for complaints were denial of claims, claim delays and unsatisfactory offers.

Missouri consumers who have claims denied by their insurance companies or feel their claim settlement is unfair should not assume they've run out of options," said John M. Huff, director of the Department of Insurance.

Health insurance continues to generate the most complaints from consumers, followed by auto and homeowners insurance.

Consumers with complaints or questions about their insurance claims or policy provisions can call the Insurance Consumer Hotline at 800-726-7390 or file a complaint at insurance.mo.gov.

MetLife and 30-plus states reach a Settlement near $500M

Fri, 27 Apr 2012 14:12:00 -0600

Met Life, the largest life insurer in the United States says it expects to pay about $188 million of the settlement this year, and the remainder over the next 17 years.

More than 30 states had claimed MetLife failed to provide life insurance benefits to some of its policyholders.

State regulators investigated MetLife's use of the Social Security Administration's "Death Master" file, a database of people who have died. A joint investigative hearing held last year revealed the company had information about the deaths of some of its life insurance policyholders but failed to pay what was owed.

Per California Controller John Chiang: "These settlements make it clear that if the industry isn't willing to make the payments legally required, we will take action, including lawsuits, to compel them to do right by their customers."

MetLife states that it pays over 99 percent of life insurance claims, and it has been working with regulators to ensure everyone is paid.

"The company has been working with regulators to develop industry best practices and is pleased to announce new processes that will provide an even stronger safety net for the limited number of beneficiaries who do not submit a claim to the company in the normal course of business," the company said in a statement.

Read more here.

Settlement Requires Humana to Refund $600,000 to Missouri Health Care Providers

Fri, 20 Apr 2012 13:11:26 -0600

Under a settlement with the state Department of Insurance, one of the nation's largest health insurance companies will refund more than $600,000 to Missouri health care providers. Missouri's insurance director today announced that Humana Insurance Company and Humana Health Plan LLC will make the payments after improperly collecting refunds from doctors and other providers.

Missouri law allows up to one year for health insurance companies to correct errors in claims processing. A comprehensive investigation by Missouri Department of Insurance Market Conduct Section found that Humana frequently sought reimbursement from providers in excess of a year after claims were paid.

Per the director of the Missouri Department of Insurance: "Many doctors in Missouri are small-business owners, and they need to know promptly if there's a payment error. That's why Missouri law gives health insurers no more than one year to make these calculations and bring providers the finality they need."

Under the investigation, 1,052 improper reimbursements were found made to 247 health care providers across Missouri. Under the settlement, Humana is required to reimburse the providers $608,642 for funds that were improperly collected.

During market conduct exams and investigations, the department reviews insurance company practices regarding the treatment of the policyholders. These reviews can result in refunds for consumers, fines and corrections in business practices, and other remedies.

Read more here.

Tornadoes Raise Homeowners Insurance Rates in Missouri

Thu, 05 Apr 2012 15:28:26 -0600

Even Missouri residents who reside far and away from last year's deadly tornadoes are now writing bigger checks for homeowners insurance.

The state Department of Insurance reports that premiums increased 5 percent between July 2011 and early 2012. This figure is based on analysis of rates charged by insurers covering 80 percent of homes. In the past, insurers were more concerned about hurricanes on the coast. Tornadoes have been getting more attention in the past few years as they cause even more damage. Of course, the worst of 2011's tornadoes was the massive twister that hit Joplin. The death toll from Joplin's tornado was 161 and it left much of the city in ruins.

Additionally, insurance ratings company A.M. Best reports that earnings for property and casualty insurers dropped about 40 percent last year to $11.7 billion. "Catastrophe-related losses wreaked havoc" and contributed to this major drop in earnings.

Per Steve Weisbart, chief economist for the Insurance Information Institute: "Insurers are starting to say, `maybe this is the new normal. They're building into rates a little more margin for catastrophic loss."

Regulators in Missouri are also observing some insurers move away from coverage that replaces damaged property with new property. For instance, a homeowner whose roof is blown off might get a check for the value of an old roof, even though it costs more to replace it with a new roof.

"It's really up to the consumer to do their own homework," says Department of Insurance spokesman David Owen.

Read more here.

State Workers Comp Insurer to Pay $2M Dividend

Fri, 30 Mar 2012 12:59:11 -0600

Missouri Employers Mutual Insurance Co., based in Columbia, says it will pay more than $2 million in dividends this spring to over 11,000 policyholders. Missouri Employers Mutual Insurance Company reports the payments will go to those who had policies in effect in 2009. Missouri Employers Mutual also says it will be reducing rates for 2012.

It will be the company's first dividend since its creation by the state's legislature in 1993 to encourage competition and lower workers' compensation premiums for employers, particularly small businesses.

These dividend payments were suggested by a recent state audit of the insurer. The audit report indicated that the company had built a surplus of more than $160 million.
The company has come under examination at the state Capitol as officials consider whether it should continue to carry a federal tax-exempt status or be spun off as a new, entirely private insurance company.

Read more here.

How to Navigate Auto Insurance Claims

Tue, 20 Mar 2012 15:12:11 -0600

Perhaps you've just been involved in an automobile accident with another vehicle. Your car is damaged, but still drivable. Your neck and back feel a bit sore. The accident was not your fault. Now you must make several very important decisions. Undoubtedly, you will also have many questions.

Given the current financial market, it has become more difficult for insurance companies to receive a good return on the premiums you pay. Therefore, greater pressure is placed on the claims departments to pay out less in claims dollars. It's important for you to remember that the only way a claims department accomplishes this goal of making an "underwriting profit" is by paying out as little as possible on each and every claim.

You can read more about this topic, as well as read CFA's Checklist for Getting the Settlement You Deserve here.

Severe Weather Awareness Week - Review Policies and Make a Home Inventory

Thu, 15 Mar 2012 11:40:05 -0600

Deadly storms produced tornadoes and high winds that caused significant damage across the southern parts of Missouri on Leap Day. As a part of Severe Weather Awareness Week, the Missouri Department of Insurance encourages consumers to review their insurance policies, and make sure they have adequate coverage. It is also advised to prepare a list of belongings.

If your homeowners insurance policy is more than five years old, it may not cover the costs associated with rebuilding a home or replacing lost or damaged possessions. Homeowners are encouraged to review their policy limits annually to ensure they are better protected from unpredictable events.

Many renters do without renters insurance because they assume their landlord's insurance will cover any damage or loss to their property. However, landlords typically have a policy insuring only the building they own, not their tenants' possessions. Renters insurance is an affordable way to protect your belongings.

It is also strongly encouraged to prepare a home inventory. A list of belongings can assist in determining the level of coverage needed prior to a disaster. Additionally, it can make it easier to file a claim.

You can read more here.

Advice For Consumers Affected by Leap Day Storms in Southeast and Southwest Missouri

Sun, 04 Mar 2012 11:40:09 -0600

The Department of Insurance offers suggestions for individuals and businesses with damage. These are a few of the tips which may assist with filing claims, preventing further damage, and avoiding repair fraud.

Contact your insurance agent or your insurance company's toll-free claims number as soon as possible.
If you have lost the contact information for your insurance company, the Department of Insurance may be able to help you (800-726-7390).
Make temporary repairs needed to prevent further damage. For instance, a tarp can help keep rain out of a broken window or damaged roof. Otherwise, further damage will likely not be covered by your insurance policy.
Keep receipts for materials that you purchase so you can be reimbursed for them.
Do not make permanent repairs until your insurance company has inspected damage. If you do, your insurance company may not reimburse you.

To view more tips, go to the Missouri Department of Insurance website article.

A Glossary of Insurance Terms

Tue, 28 Feb 2012 14:37:05 -0600

When you are faced with insurance terminology, do you sometimes feel overwhelmed and confused? Perhaps you'd like to know the difference between "comprehensive" and "liability," and find out once and for all just exactly what all of those insurance terms actually mean.

Missouri Department of Insurance has an easy to understand reference, listed by category with all of the assorted terms which may be associated within each category.

Categories included are:

Auto
Homeowners
Accident and Health
Fire and Allied Lines
Life and Annuity
Liability
Medical Malpractice
Miscellaneous

Take the mystery out of insurance terminology by checking out this handy glossary here.

Who Needs Auto Insurance?

Wed, 22 Feb 2012 14:17:40 -0600

Suppose you have an automobile accident and unfortunately, someone is hurt or killed as a result. Or, your accident could cause damage to another person's property and/or damage your own vehicle. If you are found to be legally responsible, Missouri's Motor Vehicle Financial Responsibility Law requires you to bear the cost of the other person's injuries and damages. You may not be able to pay those costs. In that case, you can lose your driving privileges or risk a criminal conviction and time spent in jail.

Most Missourians rely on automobile liability insurance to show they are financially responsible. Automobile liability insurance can protect you from paying a large amount of money at the time of an accident if the accident is your fault. Liability insurance also protects the victims against their losses. Besides liability and uninsured motorist insurance, you also may want to consider insuring against theft or physical damage to your car caused by collision, fire, theft, windstorm or hail.

Read more on who needs auto insurance, as well as other questions you may have about this topic at Missouri Department of Insurance's "Consumer Guide to Auto Insurance."

Fate Of The Missouri Second Injury Fund Is Still Uncertain

Thu, 16 Feb 2012 13:42:56 -0600

This week, the Missouri Senate voted for workers' compensation legislation that would ignore the serious financial crisis of the Missouri Second Injury Fund. The bill, perfected by the Senate Feb. 15th, can be found here. A new bill on the Second Injury Fund has been filed by Senator Dempsey and should be available online soon.

As reported by StlToday.com, the Missouri Attorney General Chris Koster emphatically warned that millions of dollars in bills are piling up because the Missouri Legislature hasn't replenished the state fund that compensates certain injured workers.

To date, the fund owes more than $14 million to 184 injured workers, bills that are not being paid and accruing interest of $1.3 million per year. That amount doesn't even count the potential liabilities for 29,000 pending cases, which are estimated could cost the state more than $145 million.

The Missouri Second Injury Fund was originally started approximately 70 years ago to encourage companies to hire World War II veterans with disabilities. It is set up to pay for work-related aggravations of previous injuries. However, since 2005, when the Missouri Legislature capped a business surcharge that finances the awards to workers, the fund hasn't generated enough money to pay the amounts due to Missouri's injured workers.

More than 1.3 million Missourians Covered by New Autism Law per Department of Insurance Report

Sun, 12 Feb 2012 13:08:33 -0600

According to a new report from the Missouri Department of Insurance, nearly 4,000 Missourians received insurance coverage for autism treatment in 2011. A new law requiring health insurance companies to cover specific autism treatments took effect January 1, 2011. The department's report shows 3,805 Missourians filed claims for autism-related treatment during the law's first year.

The report states that total insurance claims for autism-related treatments were $4.3 million in 2011. This dollar amount accounts for 0.1 percent of total claims paid by health insurers during 2011.

Per John M. Huff, director of the Department of Insurance: "This report shows good news on two fronts. First, it shows that the new law has already helped thousands of Missourians. Second, it shows the autism mandate should have minimal impact on health care costs and insurance premiums."

The law calls for health insurance companies to cover $40,000 for autism treatment, to be adjusted annually by the director of the Department of Insurance using the Consumer Price Index. On January 31, Director Huff signed an order increasing the maximum benefit to $41,263 for 2012.

Insurance Company Must Hire Attorney To Defend A Lawsuit If There Is Potential Liability To Pay Based On The Facts At the Outset Of The Case

Tue, 07 Feb 2012 09:18:00 -0600

One of the duties insurance companies owe to their insureds is the duty to defend if a claim is made against a person or entity insured by the policy.
In a case handed down this week by the Missouri Court of Appeals, Eastern District, the Appellate Court determined that the allegations of property damage stated potentially covered claims, and the insurance company did have a duty to defend those allegations. Cook's Fabrication & Welding, Inc. v. Mid-Continent Casualty Co. and Greystone, Inc., E.D. 96465.

The duty of an insurance company to defend a claim arises whenever there is a potential or possible liability to pay based on the facts at the outset of the case. This duty is measured by the policy language and the allegations in the plaintiff's petition. The insurer must consider not only those allegations, but also the facts the insurance company knew or could have reasonably ascertained. The duty arises when the facts indicate that a claim is potentially covered, not just when a claim is obviously covered by the policy. To be relieved of this duty, the insurer must demonstrate that there is no possibility of coverage.

In this case, Mid-Continent asserted that the insurance company had no duty to defend based solely on the insurance company's assertion that it did not have to pay the claim because of a particular policy exclusion. Ultimately, the court determined that the exclusion relied on by the insurance company did not apply and the insurance company should have defended the claim.

WORKERS WHO SUFFER WORK RELATED OCCUPATIONAL DISEASES NOW HAVE THE OPTION OF SUING THEIR EMPLOYER IN CIVIL COURT

Tue, 24 Jan 2012 14:50:15 -0600

In a case decided September 13, 2011, the Missouri Court of Appeals, Western District, announced a "substantial departure from prior law" in holding that employees, who suffered work-related occupational diseases, now have the option of suing their employers in civil court. The case is State ex rel. KCP&L Greater Missouri Operations Company v. Cook, 353 S.W.3d 14.

Prior to the 2005 Amendment to the Missouri Workers Compensation laws, employees were prohibited from filing lawsuits in civil court against their employers for occupational diseases. The legal remedy for recovering for an "Occupational Disease" was exclusively a Workers Compensation claim. The 2005 amendment changed the definition of "accident" to now be limited to an injury caused by a specific event during a single work shift.

Further, the 2005 amendments require the workers compensation statutes to be strictly construed. Although "occupational disease" is defined in the workers compensation amendments, the court found that the plain language of the 2005 amendments' exclusivity provisions are limited to injuries or death caused by an "accident". Now, under the 2005 "strict construction" requirement, the court found that the law's exclusivity provision no longer applies to conditions such as asbestosis and cancer. Therefore, workers are now allowed to pursue claims against their employers directly in the civil courts for diseases and medical conditions caused by their employment.