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Insurance complaints would be concealed

Supporters say a bill safeguards consumer privacy; others disagree.
Monday, May 16, 2005 | 12:00 a.m. CDT; updated 2:05 a.m. CDT, Wednesday, July 2, 2008

JEFFERSON CITY — Among the many bills sent to Gov. Matt Blunt’s desk on the final day of the session is one that would make consumer complaints about insurance companies confidential.

Supporters say the bill is about consumer privacy. But some lawmakers say it would primarily benefit insurance companies, making it harder for consumers to learn about alleged wrongdoing.

The bill would close consumer complaints filed with the state Department of Insurance, as well as any documents filed with the agency related to an investigation of an insurance company. Those documents could be obtained only through a subpoena or if the department director opts to release them in the public interest.

Doug Ommen, the department’s deputy director, said the department wanted the new provisions so consumers would feel comfortable lodging complaints against an insurer.

“When people avail themselves of the government and file a complaint, I don’t think many of them realize that they are turning over private information to the public,” Ommen said.

Sponsoring Rep. Brian Yates, R-Lee’s Summit, contends the legislation is important “because it protects consumers’ private medical conditions from being discovered by their neighbors.”

But Sen. Tim Green argues that closing the complaint information really benefits insurance companies.

“It seems to me we continue to try to make it more difficult for the individual that purchases insurance to receive it,” said Green, D-St. Louis. “We’re not helping the consumers of the state of Missouri, we’re helping the industry and that’s a shame.”

The legislation also has raised concern among groups that advocate for open government.

“I don’t think there should be any precedent for closing complaints filed with the state,” said Jean Maneke, a lawyer representing the Missouri Press Association. “Most citizens don’t have time to investigate these types of things themselves, so often it is the news media that picks up on certain problems with an insurance company and often the news media alerts (consumers) to the problem.”

Ommen said digging through archived copies of consumer complaints often proved time-consuming for department staff who were responding to requests for the information. If Blunt signs the bill into law, Ommen said, the department would still maintain an incident report with the names of insurance companies and a general description of the complaints filed against them, which would be open to the public.

An earlier version of the bill would have gone much further, allowing insurance companies to shield any information gathered during a self-audit from being used in court. The only exception would be if a judge determined the insurance companies falsely took advantage of the self-audit privilege or if the material was not covered under the privilege.

That provision concerned Sen. Chris Koster, who vowed to filibuster the bill unless it was removed. The former prosecutor argued that allowing the insurance industry to keep those documents secret would seriously damage the court’s ability to find out the truth. He said it would also make it more difficult for victims of insurance companies to prove their cases.

The effect would have been to create “a new cross section of information that is more important than telling the truth when you’re brought into a court,” said Koster, R-Harrisonville.

Sen. John Loudon, R-Ballwin, who handled the bill in the Senate, agreed to remove the self-auditing language. But he still supports the concept.

Encouraging companies to do self-audits would ultimately benefit the consumer by fixing problems quickly, said Calvin Call, executive director of the Missouri Insurance Coalition.

The Department of Insurance also backs the idea of shielding self-audits so more companies will examine their practices and correct mistakes, Ommen said.

Even though the self-audit privilege was stripped from the bill, Yates said he plans to try again next year.

“I think the problem that we have now is without that privilege, (companies) are discouraged from doing these audits because they are afraid that any documents promulgated from an audit could be used against them,” Yates said.


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