What recourse do consumers have when they’re treated unfairly by insurance companies or other businesses? Not much in New Hampshire, despite efforts on the part of consumer lawyers to try to persuade our legislature to change things.
I recently had a frustrating experience with an insurance business. I settled a case for a client, with the expectation that the settlement check would arrive within 10 days. Instead of negotiating with an insurance company, I was working with a “third-party administrator,” or TPA. Many large corporations, in this case, FedEx (their driver had hit my client’s car causing it to be totaled), either self-insure or insure with large non-traditional companies not licensed in New Hampshire, so they use local TPAs to investigate and adjust claims.
When the settlement check was late, I contacted the adjuster and was assured that prompt payment would be forthcoming. Instead, my client received a letter from another TPA advising that it was handling the claim. When I contacted the representative, he informed me that FedEx had changed TPAs, and it was now trying to process all the claims which the former TPA had been handling. He assured me I would see the check soon. Another month passed, and nothing. Suddenly, a large check arrived by overnight mail.
I deposited it in my firm’s trust account (lawyers are ethically required to hold funds in these accounts until the check has cleared) and advised my client she would have her money soon. Checking my account a few days later I saw that the funds were available, so I transferred some of the money to my payment account. The next day I viewed the account and learned the check had been returned.
I called the New Hampshire Insurance Department, which is charged with regulating insurance companies in New Hampshire. The only response I got was that I should call the TPA which issued the check. I had done that, with my calls going to voicemail and no return call, and I knew a call from the insurance department would prompt quicker action. But despite the obvious urgency of the situation, the insurance department employee refused to take that step, saying that no action would be taken without a formal complaint in writing.
New Hampshire has a law prohibiting unfair or deceptive actions by businesses. RSA 358-A:2 makes it illegal “for any person to use any unfair method of competition or any unfair or deceptive act or practice in the conduct of any trade or commerce within this state.” But, exempted from this law are “trade or commerce that is subject to the jurisdiction of the bank commissioner, the director of securities regulation, the insurance commissioner, the public utilities commission, the financial institutions and insurance regulators of other states, or federal banking or securities regulators.”
Thus, some of the largest institutions we regularly do business with, and are treated badly by, are protected from lawsuits intended to protect consumers. Theoretically, this is because agencies like the insurance department are in place to protect us. In fact, there is a similar law prohibiting insurance-related businesses from engaging in unfair or deceptive practices, RSA 417:3. The insurance department claims that its “primary responsibility is to enforce the insurance laws and rules of the state. … The department’s Consumer Service Officers (CSOs) take great pride in their ability to assist customers and strive to satisfactorily reconcile grievances and mediate disputes.”
The procedure for resolving complaints is dependent on the department’s willingness to act, is cumbersome, and only after the department has investigated and found a violation is a consumer able to be compensated. In my situation, had the TPA not been willing to promptly rectify the wrongful rescission of its payment (fortunately it was), I would have had to file a written complaint and wait for the insurance department to investigate and hold a hearing before I could start to recover my client’s losses.
For lawyers who deal with insurance companies on a regular basis trying to investigate and settle claims, these roadblocks to seeking justice have been an ongoing source of frustration, and there have been several attempts to try to convince our legislature to remedy the situation. We have learned that our legislature is most responsive when it hears from citizens who have been harmed, and who are willing to share their stories.
One of the goals of our civil trial lawyers’ association, the New Hampshire Association for Justice, is to advocate for consumers by supporting legislation to make laws fairer for them. If you have a story about how you have been harmed by unfair laws, and are willing to share it with the Legislature, I encourage you to contact any lawyer who is a member of the Association, or the Association’s Directors, Marissa Chase and Lisa Gowern. The address of the Association is PO Box 1583, Concord, NH, 03302, email lgowern@nhaj.org, phone 224-7077.
We are fortunate to live in a democracy where every citizen has the right to participate in making the laws which govern our actions. Sharing your experiences with your elected representatives is an effective way to do that. Lawyers can help, and I believe it is part of our responsibility to participate in the legislative process on behalf of our clients, but we need your help.
