Knight Chair in Investigative & Enterprise Reporting
How-to guide:
Investigation of the ‘worst-performing insurance company’
By William Gaines
All it takes is five words to describe the purpose of this project: Insurance companies should be investigated. The project addresses an area of business that is known for wordiness and clauses written in small print. Insurance companies play a large role in people's financial well-being by replacing their homes and cars if they are destroyed, providing retirement income and death benefits and paying medical bills. But first they have to take a person's money.
Background
Most insurance companies are privately owned, for-profit businesses that operate without federal regulation. They are regulated by the states in politically sensitive agencies. The commissioner is usually an insurance company executive who made large donations to the political organization that elected the governor. At the end of the gubernatorial term, he will go back to the insurance company to a job with greater compensation. This situation is called the "revolving door." It is as if he never left his job.
So insurance companies are monitored by their own people and the excuse given for not having some outsider as crusading commissioner is that only someone among them can understand the problems of the industry. But if an insurance company makes a series of bad investments and uses money intended for a policy holder's retirement to recoup their losses, or if they just make up far-fetched reasons for not paying medical bills or only paying a small amount, or when they make a practice of taking six months to pay a large medical claim without including interest, then the commissioner is supposed to step in and correct them.
Commissioners are supposed to monitor the companies by hearing complaints and making regular audits. Also, the information required of the companies is public record and readily available, much of it online.
Even the big city newspapers do not field an insurance reporter. The medical writer may cover accident and health issues, and a consumer writer would write of complaints of unfair practices, but otherwise it would be rare to find anyone at the newspaper who knows about insurance. That is because the insurance industry has its own thing going. They have jargon that has to be deciphered. But it can be done, and important stories are awaiting reporters.
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