Complaint Files – Do’s and Don’ts

This illustrious panel featured three attorneys and, as a result, started with a disclaimer (panelists’ views are not necessarily the views held by their organization). The panelists: Megan Curoe, Resolution Life; Michelle Meschke, Travelers Companies, Inc.; Rebecca Vasquez, RegEd, were moderated by Joan Olson, Swiss Re Life who started the discussion with…

Why is it so important to have a complaint file? And the response—remember the attorneys—was clear and simple:  Keeping a complaint file is the law and is considered to be a fraudulent act if not kept. However, the panelists pointed out that actual complaint requirements vary by state and all organizations should know what the requirements are and where to find them. In addition, they noted that sometimes the law is silent on particular areas. Panelists encouraged companies to know what department of insurance guidance is by state.

Model samples
Companies were encouraged to establish standards for complaint files and cited the NAIC as a significant resource to help companies set up the ideal complaint file and remain compliant. Currently, about 20 states have actually adopted or adapted the NAIC model—other states have used the NAIC model, but have altered more extensively.  NAIC has standardized complaint data and has issued a Market Regulation Handbook with examination standards.

Complaint responses
Panelists discussed the importance of having access to closing letters from regulators.  The regulators present stated they are willing to share closing letters but cautioned the closing letter is final—not an invitation for dispute. That caution was acknowledged by many stating their employer organization simply wanted to know the final disposition. Regulators suggested a quick email asking for the final disposition if it has not been received.

Things to remember (nuggets from the panel)

• Break down silos in big companies
• Don’t recreate the wheel—use templates or standards if important or unique descriptors are used in a complaint
• A complaint may be the first time a company interacts with a regulator—make the impression a good one
• Provide what’s asked for in the cover page—the complaint process does not need to be adversarial
• Develop a rapport with the DOI, so if you have something that should not be in writing (and therefore in the complaint file), you can pick up the phone.
• If something is proprietary…note that and all professionals will comply where possible
• Recognize the correct channel to respond—varies by state
• Address all items in the complaint
• If it makes sense, contact the complainant to let them know the company cares and is working to getting.
• Don’t leave the disposition as a surprise…tell the regulator up front what company decisions are or are likely to be
• Break down the complex (from the audience perspective), use plain language, break up the copy in letters by topic for complex responses
• Anticipate questions from the complainant’s perspective
• Correct or own errors and be truthful
• See the complainant’s side…put yourself in their shoes
• Make sure information is error-free in terms of spelling, grammar

Remember, complaints are the last stop before litigation
Participants were encouraged to remember a plaintiff’s lawyer wants to make the corporation look bad and to remember corporate behaviors or comments, when viewed by an outsider can contribute to that negative take.

Here’s what companies can do to positively position the story:

• Keep in mind that trials are expensive and time consuming. Insurance companies are not considered to be sympathetic entities and, therefore, will frequently lose.
• Do not sign a letter that you do not agree with—you may become a star witness for your organization; you must completely believe in the decision or situation.
• Listen to the words behind the words—internally especially
• State clearly if you are seeking legal opinion
• Consider your letter to complainants to be exhibit 1 or 2—make sure the letter is correct, personal and still working for resolution
• Be prepared to apologize—it makes you look good
• Make sure your files are clean and complete

Litigation—here we go
No one looks forward to being deposed but a deposition can be a valuable learning tool.  If you are deposed as an insurance industry professional, consider:

• View being deposed as a training session for writing letters—it’s amazing how something that seems innocuous when composing can be twisted slightly.
• Be prepared to admit a genuine mistake if discovered before, during or after deposition—do not hide knowledge and never lie.   Remember, cover up is often worse than the crime.

Complaints are an early warning system—a gift
Complaints are not fun but smart companies trend information or perform root-cause analyses of complaints to help identify issues for products or agents.  These companies pay attention and work to resolve systemic issues.  Get ahead of issues and what DOIs may know about complaints about your organization—proactive resolution may be viewed favorably.

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