Written by Dolores Kazanjian O’Brien Friday, 11 December 2009 00:00In response to numerous constituent questions and complaints with respect to insurance coverage, Assembly Member Michelle Schimel sponsored a community forum in which she invited representatives of the New York State Insurance Department to address community residents and answer questions.
Ivan Lafayette, deputy superintendent of Community Affairs, began the discussion by cautioning the consumers to become informed buyers. He said, “You have to read your policy, and/or buy it from someone you can trust.” Although New York State has legislation to control the insurance industry, Lafayette emphasized that, in the final analysis, it is an open marketplace; therefore the consumer must shop wisely. He added, “Make sure that you have the protection that you need, but don’t buy what you don’t want and don’t need.”
An important function of the Insurance Department, Lafayette said, is to investigate fraud. “When people defraud,” he said, “we all pay for it.” Another function is to make sure that the insurance companies that operate in New York have the funds to cover losses. “It is a very complex organization,” he commented. The agency’s web site is http://www.ins.state.ny.us.
Lafayette proceeded to comment on the debate going on about health care. He asked rhetorically, “Does the United States have the best medical care?” He answered, “Maybe, maybe not.” Lafayette then went on to cite data. Health care in the U.S. costs $6,714 annually per capita, almost double that of most other countries (Germany is $3,371, Canada $3,678 and United Kingdom $2,760). Our life expectancy is 77.8 years, one of the lowest in the developed world (Germany is 79.8, Canada 80.4 and United Kingdom 79.1). Preventable deaths in the U.S. per 100,000 is 100; in Australia it is 71 and in Canada 77. The U.S. has the highest death rate per 1,000 live births among developed countries: 6.9; Germany is 3.8, Canada 5.4 and United Kingdom 5.0. Lafayette handed out charts with comparative health data. He commented, “We just can’t say, ‘we will do nothing.’”
Some audience members protested, claiming that his presentation was biased. One man shouted out, “My uncle died in England because he waited three years for an operation. What we need is tort reform.” Others protested that they had not come to discuss health insurance. The main topic on their minds seemed to be homeowners insurance, and specifically the large number of seemingly arbitrary cancellations, in some cases after many years of being insured by the same carrier.
Lafayette turned the meeting over to Deputy Superintendent for Fraud and Consumer Services Steven Hachman, who addressed the issue of homeowner policy cancellations. Hachman agreed, “This has been an area of major concern. We want to make the coverage available and affordable.” He said that the problem goes back to the 2005 Gulf Coast hurricane and the high number of claims thereby incurred by the insurance companies, particularly Allstate and State Farm. Under state law, Hachman said, insurance companies are allowed to cancel up to 4 percent of their homeowner policies; therefore the cancellations are legal and the Insurance Department can do nothing about it. In fact, Hachman to some extent defended the policy by pointing out that new companies are entering the marketplace. “We are concerned about affordability,” he said. In response, one listener asked, “Can they cancel even after 30 years?” Hachman agreed that such cancellation would be legal. In addition, the Insurance Department vigorously enforced a regulation that prohibited insurance companies from giving favored treatment to customers who have other insurance with them, thus precipitating cancellations in cases where the insurance company had been carrying homeowners insurance in “exchange” for carrying automobile and other insurances. (Full disclosure: This reporter’s homeowners insurance was cancelled after 40 years with Allstate; many others in the audience had similar experiences.) “Understand,” Hachman said, “that they are allowed to do that.” “In the end,” Hachman said, “having two insurers may be a good thing.”
Hachman encouraged everyone to apply for flood insurance, which is administered by FEMA.
Other questions had to do with medical insurance, long-term care insurance, and a problem of flooding on Port Washington Boulevard. Schimel said that she would look into the latter issue.
The Insurance Department website has a wealth of information, handouts that can be downloaded and/or printed, and a link by which consumers can disclose problems, report fraud, or ask questions. Schimel also invited calls to her office, 516-482-6966 (Great Neck) or 518-455-5192 (Albany). She said that her office works closely with the Insurance Department. In response to a question from the Port News, Lafayette said the Insurance Department representatives meet frequently to discuss policy, and when an issue seems to merit legislation, they make a recommendation to the legislature.