Colo. Commissioner to Investigate American Family Insurance

The Insurance Journal
February 21, 2006

Following a Colorado TV news report, Colorado's insurance Commissioner said he plans to investigate American Family Insurance regarding its claims practices.

The commissioner said there has been a higher-than-average number of complaints against the company. "If they are violating the law and not complying with the law we will certainly take action," Commissioner David Rivera told 7NEWS.

Rivera said public concerns were brought to his attention following the TV station's report about the company.

The news report indicated the company might have a goal to reduce claims payments by a certain percentage over four years. An insurance industry expert who testified for the plaintiff said that practice is faulty because it is based on what the competition has paid, not the facts of an individual case.

American Family said it continues to pay what it owes in claims, and that the business plan identified procedures to help avoid the overpayment of claims. The company also issued a written response to the insurance commissioner's decision to begin a market conduct examination.

"We're confident Commissioner Rivera will consider the facts and act in the best interests of Colorado consumers," American Family said in its statement. "We believe he already has access to an ample amount of information, but we will continue to provide information as requested."

Copyright © 2006 by Wells Publishing Company

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