Louisiana Department of Insurance Office of Consumer Advocay

Volume 1, Issue 7
OCTOBER 2010

Home Buyer Classes sponsored by P.R.E.A.C.H
10/7/2010
5:30 p.m.- 7:30 p.m.
Family Services of Greater Baton Rouge
Baton Rouge, LA

Home Buyer Classes sponsored by P.R.E.A.C.H
10/14/2010
5:30 p.m. - 7:30 p.m.
Family Services of Greater Baton Rouge
Baton Rouge, LA

REACH Community
Resource Fair
10/15/2010
9:00 a.m. - 2:00 p.m.
West Baton Rouge Parish Community Center
Port Allen, LA

Congressman Anh Cao
AAA Health Fair
10/16/2010
9:00 a.m. - 2:00 p.m.
Dr. Martin Luther King School
New Orleans, LA

Jefferson Parish Senior Citizen Exposition
10/20/2010
9:00 a.m. - 2:00 p.m.
The Alario Center
Westwego, LA

Home Buyer Classes sponsored by P.R.E.A.C.H
10/21/2010
5:30 p.m. - 7:30 p.m.
Family Services of Greater Baton Rouge
Baton Rouge, LA

For speaking engagements scheduled after the release of the newsletter or for more detailed information about those engagements listed in the newsletter, visit our website at www.ldi.la.gov under the events tab.

If you missed a previous newsletter, or would like to read past issues, they may be viewed under the consumer section at www.ldi.la.gov.

***********ATTENTION*************
The 2010 Conference on Insurance Fraud and Vehicle Theft will be held on October 13, 2010, at the Crowne Plaza in Baton Rouge. A copy of the agenda for this conference may be found at www.ldi.la.gov under the events tab.

For more information, call (225) 219-0632 or you may
e-mail the department at chcouvillon@ldi.la.gov.
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To find out if Consumer Advocacy will be in your area or to request a speaker for your organization or group, call (225) 219-0619 or send an email to
consumeradvocacy@ld.la.gov

If you no longer wish to receive this newsletter please send an email to the following address with "REMOVE" in the subject line.
consumeradvocacy@ld.la.gov

Retained Asset Accounts and Life Insurance
Death of a loved one can cause emotional and financial stress.  Life insurance is designed to help families plan for the financial burdens that can be associated with losing a loved one.  Life insurance policies provide a death benefit to a beneficiary that can be a single payment or a Retained Asset Account (RAA).  RAA is a temporary account to which the death benefit is deposited to give the beneficiary some time to consider all financial options while being paid interest on the proceeds.  Some RAAs function much like a checking account, while others allow the beneficiary to choose the option of drafting funds when needed.

The National Association of Insurance Commissioners (NAIC) suggests that you consider the following information if a life insurance company offers you a Retained Asset Account as an option to settle a death claim:

•What interest rate will be paid on the proceeds, how will the interest rate be determined and how will the interest amount be credited to the account?
•Will the proceeds be held in a bank, which would make the proceeds FDIC insured up to the limit permitted by law?
•Will the proceeds be held by the insurer, which would make the proceeds subject to coverage by a state guaranty fund should the insurer fail?
•Will the proceeds be held in a bank checking or an insurer draft account and what banking services, if any, will be provided?
•What services will be provided at no charge and what services will involve a fee?

Take your time in determining if a RAA is right for you.  If you have questions about RAAs or other life insurance proceed options, contact the LDI at (800) 259-5300 -or- (225) 342-5900.
Discount Medical Plans – Not an Alternative for Health Insurance

With medical costs rising and more people going without insurance, discount medical plans offering cut-rate fees have a great appeal. However, some unscrupulous marketers do everything possible to imply that the discount plans are a legitimate alternative to comprehensive major medical coverage.

Medical discount plans can be useful for some consumers looking to save money on health care, but these plans are not the same as health insurance. Medical discount plans do not pay any health care costs; instead, they require you to pay a fee for a list of health care providers who are willing to offer discounts to members of the plan.

Telemarketers often pitch to consumers a long list of false claims, including: that they work very closely with major medical insurers; that their discount plan is widely accepted by doctors, pharmacies, and other health care facilities; and that their plan will save consumers up to 85 percent on medical expenses.

Discount health care programs primarily offer access to lower rates on ancillary health care services typically not covered by health insurance plans, such as dental, pharmacy, vision, chiropractic and hearing. Legitimate discount health care companies have always made clear that the access they provide to these services is not insurance.

How do you know medical insurance from a medical discount plan? When shopping around, investigate the details before you pay any money.

  • Locate a telephone number and/or Web site of the company that you are considering doing business with.
  • Before paying any money, ask the company for a list of its providers who participate in its plan. Call the providers and ask about the services and discounts they are offering.
  • If the plan is unable to promptly provide you with a list of providers, consider taking your business elsewhere.
  • Verify the details of any plan carefully. Read the fine print, paying special attention to the refund policy. If you are having problems readily getting information from the company before you buy, they are not likely to be responsive once you have given them your money.
  • If your usual medical or dental providers do not participate, see if other doctors in your area accept the plan and will give you the discount that the plan promises. Some legitimate plans offer a “get acquainted” or “initial consultation” visit so you can meet a practitioner who participates in the plan before you commit to becoming a member.
  • Try to calculate what your total payment for a discount plan will be for a given period of time. You could be responsible for paying a substantial amount up front, in addition to monthly fees and other costs. The cost of the program may total more than the savings you anticipate.

If you’re not sure, contact the Louisiana Department of Insurance at (225) 219-4770 or (800) 259-5300. If you feel that you have been the victim of a scam/fraud, call the LDI Fraud Section at (225) 342-4956 or (800) 259-5300. Callers contacting the Fraud Section who do not want their names used, can request that their involvement be kept confidential.

Louisiana Licensed Adjusters

Louisiana licenses and regulates three types of claims adjusters: public, company and independent adjusters.  An insurance claims adjuster is someone who investigates insurance losses for property damage, liability or bodily injury and negotiates settlements. In most states, adjusters must be licensed and can work only in their line of business (automobile, personal, commercial, crop, or comprehensive).

The professional role that each type of adjuster plays in the claims settlement process is quite different.  A public adjuster is an insurance claims adjuster who is an advocate for the policyholder in appraising and negotiating a first party insurance claim.   The company adjuster is an employee of the insurance company and settles claims against the insurer.  As a policyholder, you may think that an independent adjuster is one who would also advocate for you like a public adjuster; however, the independent adjuster also works for the insurance company.  An independent adjuster is not an employee of the company, but rather a contracted professional working to settle claims for the company.

If you are considering hiring a public adjuster to assist you with a substantial loss; here are five ways to find a reputable public adjuster:

  • Pool the people you trust. Call your lawyer, tax accountant, or your neighbors and ask if they have used a public claims adjuster or know someone who has.
  • Contact the National Association of Public Adjusters. This trade organization maintains a database of members with at least two years experience, and upholds a professional code of conduct. 
  • Interview the candidates.  Ask about their rates, references and credentials.  Contact their references and quiz former clients on their performance.
  • Call the Louisiana Department of Insurance.  Louisiana licenses and regulates public claims adjusters. Make sure your prospect is in good standing with no unresolved complaints.
  • Ask your insurance agent.  Sounds like a conflict of interest? Not really. You’re hiring an adjuster to represent you to the insurance company. Ask your agent about this person’s reputation within the industry.
EDITOR’S LETTER

Fall tips for preventing fire losses

Fall has arrived and the temperatures will soon be dropping.  We will be turning up the heat and hanging outside to catch a cool breeze.  We should all take some precautionary measures to reduce our chances of having a fire loss.  Our homes are one of our greatest assets, and we should be wise in protecting them.
Some important tips to remember:

  • Check smoke detectors and change batteries annually.
  • Do not leave candles unattended.
  • Do not throw cigarette butts onto dry grass or near a pile of leaves.
  • Clean or replace your furnace filters before use.
  • Have your fireplace cleaned and checked regularly.
  • Use caution with space heaters and portable heaters.
  • Clean the exhaust ducts on your clothes dryer.
  • Do not overload electrical sockets, and be careful when using extension cords.
  • Make sure your fire extinguisher is easily accessible to the entire family.
  • Be careful when grilling, smoking or frying food outside near the house.
  • Turn off all heat sources before leaving the home for an extended period.

October is fire safety month.  For more fire safety tips or educational information, contact the Louisiana State Fire Marshal’s office at (225) 925-4911 or (800) 256-5452 and visit their website at www.lasfm.org.

Deputy Commissioner
Clarissa A. Preston, CIC, APIR

Office of Consumer Advocacy P.O. Box 94214 Baton Rouge, LA 70804-9214
(225) 219-0619 or (800)259-5300 www.ldi.la.gov consumeradvocacy@ldi.la.gov