Gov. Dennis Daugaard has asked South Dakota Labor Secretary Pam Roberts to review her agency’s procedures for investigating consumer complaints against insurance companies.
The move comes after the Argus Leader newspaper in Sioux Falls reported that the Department of Labor and Regulation’s insurance division has not publicly disciplined Ability Insurance Co. despite having evidence that the company allegedly broke state laws when it wrongfully denied claims for some long-term care policyholders.
Long-term care policies offer consumers a way to manage the financial risks that come with aging. They can help pay for home health care, assisted living and nursing homes.
“Sometimes these cases can be complex and time consuming, but the division should always strive to act as quickly as possible to investigate bad actors and protect consumers,” Daugaard said.
He wants a report from Roberts in the next 30 days and said he will make it public.
Ability, based in Omaha, Neb., has been sued half a dozen times in federal court in South Dakota, and it also has been sued in Washington, Mississippi, Iowa and Montana. The company says it has enacted reforms that should put an end to the lawsuits, and that only two cases – including one in South Dakota – are currently being litigated in federal court.
South Dakota’s state insurance division reported closing 650 consumer complaints in 2012, 204 fewer than in 2011. Industry observers say the division has minuscule resources when compared to the major insurance companies it is tasked with regulating.
State laws require the division to keep confidential the details of its investigations of companies, and officials have not commented on the division’s investigation of Ability.
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