State Consumer Group Targets Insurance Issues

One on One

October 22, 1990

One on One is a weekly feature offering excerpts of interviews conducted by The Evening Sun with newsworthy business leaders. Janelle Cousino is executive director of the Maryland Citizen Action Coalition, a 10-year-old consumer advocacy group with 67,000 members statewide. It is affiliated with the national organization Citizen Action.

Q. You're known for your efforts in the legislature concerning automobile and health insurance. What are your goals in the upcoming legislative session?

A. We want to make the insurance relationship with consumers fairer. There's a perception, and I think a valid one, that insurance companies pretty much get their way in Annapolis . . . [our goals] would be how regulation can in fact involve and represent consumer viewpoints and this particularly involves the consumer advocate. We were able to get a consumer education and advocacy law passed . . . but it's like 10 percent of what we really had hoped for, which would have included having a consumer advocate who could in fact put on a case to counter what the companies have put on, including being able to call witnesses and cross examine the companies and actually do an independent review. The companies have argued that this is a second regulatory hoop that they have to jump through. We don't think so; we believe in fact it's just making the regulatory process fairer because the insurance commissioner can't be judge, jury and prosecutor all at the same time. But having two viewpoints to chose among -- or even deciding somewhere in between the two viewpoints -- makes a fairer process. This is similar to how utilities are managed and . . . we think it makes sense for insurance as well. Maryland has been quite lenient on the insurance industry. We have exempted them from more anti-trust requirements than other states. There is no reason for this exemption and it should be repealed. All other businesses are subject to this basic consumer protection law. Historical data collection activities are the only joint activity that should be allowed by the insurance companies.

Q. So your main effort in the next legislative session will be to have what is the equivalent of a People's Counsel, such as there is for utilities regulated by the Public Service Commission, in the insurance division?

A. Right . . . we think there are some protections that the consumer needs to have, too. In terms of the cancellation powers of the companies, non-renewals -- we think this is being abused right now by some of the companies. We think the standard for adequate evidence [in an insurance case] required by the Insurance Division is now very much in favor of the companies and not on the side of the consumer. That needs to change. Some disclosures need to be up front. You don't know right now when they're going to surcharge you and how often they're going to change your status by moving you to a less favorable company. That's not canceling; that's moving you to another company, but it's going to cost you more, and you should know that in advance and you don't know that in advance now. We are going to look at what the Governor's Commission on Insurance comes up with, and there will be some things resulting from that that probably . . . will be unfair to consumers. One thing the industry has talked about is wanting it to be [legally] fraudulent for the consumer to have filled out their insurance application incorrectly; that would be a felony. And I don't think treating consumers as felons is what we're going to allow to occur in the State of Maryland.

What is your organization doing as far as the ongoing controversy concerning territorial rating?

A. Well, we think that the individual's rates really ought to be determined on the rating factors that they in fact personally have, so it's their own driving record, it's their number of miles driven, some of their driving behavior. We also need to look at other factors that impact on the rates -- insurance industry practices.

Q. What practices?

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