Governor Paterson Announces Insurance Department Recovered $8.12 Million for Consumers Last Quarter

NEW YORK, NY (11/20/2009)(readMedia)-- Governor David A. Paterson today announced that $8.12 million was recovered for consumers from insurance companies as a result of 2,030 consumer complaints filed with the New York State Insurance Department between July 1 and Sept. 30. Since the beginning of the year, a total of $24.12 million has been recovered for consumers as the result of 5,975 complaints.

"New York State is committed to safeguarding consumers and making certain they get what they pay for when they buy life, health, property and other forms of insurance. Insurance is designed to protect the consumers who purchase it and New York State will continue to make sure that insurance companies fulfill their end of that bargain," Governor Paterson said.

"These are difficult economic times for virtually everyone and New Yorkers need to know they can get help when they run into problems with their insurance companies. One of the Insurance Department's primary missions is consumer protection and we are committed to being a forceful advocate for consumers who need help with insurance-related issues," Insurance Superintendent James Wrynn said.

The $8.12 million recovered for consumers during 3rd Quarter 2009 included these cases:

The Insurance Department helped a woman to obtain the full $25,000 benefit she was entitled to receive from her ex-husband's life insurance policy. The woman contacted the Department after her ex-husband's insurance company initially gave her $10,510 less than the full amount. The company had deducted the money because her ex-husband had taken a $10,510 loan from the policy's cash value before his death. However, the insurer paid the full death benefit when the Department's inquiry showed that the insurer was aware that the couple's divorce degree required the ex-husband to maintain a $25,000 policy with her as beneficiary.

Another life insurance company paid a $45,000 death benefit to the son and beneficiary of a New York City man. The insurer initially declined to honor the life insurance policy because premiums hadn't been paid. However, an Insurance Department inquiry revealed that the policy contained a waiver of premium provision covering disability. The inquiry showed that the father had been ill and was unable to make premium payments when the policy lapsed three months before he died.

A health insurance company reversed course after the Department interceded for a North Syracuse woman suffering from bronchitis, asthma and other ailments. The woman contacted the Department complaining that her insurer refused to cover the cost of several drugs prescribed by her physician. The woman filed a complaint with the Department after filing two internal appeals with the insurance company which the company denied. The insurer agreed to cover the woman's drugs when the Department's inquiry revealed that her health plan did not require a pre-authorization by the insurer for coverage.

The Insurance Department handles approximately 60,000 complaints and 200,000 telephone calls annually from consumers with questions or complaints about life, health, auto, property and other forms of insurance. The Department investigates each complaint, and, depending on the result of that investigation, the Department may direct the company involved to compensate the consumer. Consumers with insurance questions or concerns can call the Department's consumer hotline at 1-800-342-3736. The hotline is open from 9 a.m. to 4:30 p.m. Monday through Friday. Consumers may also ask questions or file complaints using the Department's website, www.ins.state.ny.us.

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