By Mark Morris
The Kansas City Star
December 11, 2006
Insurance agent misconduct and fraud is widespread and getting worse, according to experts interviewed by The Kansas City Star.
Among the most common abuses: agents who steal a client’s premiums by failing to forward them to the insurance company. Bad agents also sell unlicensed products or coverage that is unsuitable. And some are just crooks, no better than a policyholder who commits insurance fraud.
“A disturbing and growing number (of agents) won’t hesitate to bilk their own clients in order to pad their own lifestyle or bail out an agency that’s in trouble,” said James Quiggle, a spokesman for the Coalition Against Insurance Fraud, a nationwide advocacy group supported by insurance companies, regulators and consumer groups.
“It’s a front-and-center problem for regulators all over the country.”
To be sure, most agents are honest, according to experts who have studied the insurance industry.
http://www.kansascity.com:80/mld/kansascity/16210675.htm
Comment:
By Don McCanne, MD
Health care injustice is not only tragic, it is also infuriating when it is due to criminal misdeeds of entrusted advisors. But the problem of dishonest insurance agents is negligible compared to the problems inherent in the way individual plans are marketed and sold. It is the honest, ethical agents who are trying to do their best for their clients who are the real problem, though through no fault of their own.
Insurance agents have a difficult task. They must help their clients purchase plans that are affordable, that provide adequate financial protection, that will cover preexisting disorders, that will ensure that providers are accessible, and they must be certain that the insurer is reliable and capable of assuming risk. Truth told, there are no health insurance products that meet all of these standards. So the agent is in a position of assisting his/her client in selecting a compromised product, and may not even be able to provide any product if costs are prohibitive or medical underwriting prevents coverage.
Insurer administrative costs are already outrageous, yet the insurance agents add still another layer of pure administrative costs that provide no medical benefit. Under our fragmented system of financing health care, the services of an agent are essential whether that function is performed by an independent agent or an agent of the insurance company. It’s simply more waste. But worse, the need for competitive premiums results in products that fall short on the goals of comprehensive, affordable coverage for any and all applicants.
What we need is a single insurance product that covers all reasonable, beneficial services, and one in which enrollment is automatic for everyone for life. We wouldn’t need brokers to help us do that if we had a single payer program of national health insurance.