Insurance companies with unsettled claims from Hurricane Ivan have been given until March 25 to pay policyholders, or explain to Insurance Commissioner Walter Bell why the claims have not been paid. Once claims are settled, the department’s regulations requiring policyholders to be paid within 30 days will go into effect.
The mandate comes two days after agency officials met with residents and business owners in Orange Beach who complained of widespread delays related to the claims from the September storm.
“The information we have collected has moved beyond the anecdotal to the concrete,” Alabama Insurance Commissioner Walter Bell said in a news release. “In the last month, we have seen an increase in complaints to the department on how claims are being handled. It could easily be construed that a handful of insurers are stalling their policyholders.”
No specific insurers were named. But Alfa Insurance, one of the area’s largest insurers, for example, has settled 50,570 Ivan-related claims with 2,510 left to go, J. Paul Till, an Alfa spokesman told the Mobile Register.
“There is nothing we would like better than to close our books on Hurricane Ivan and have all claims resolved within the next 30 days,” Till wrote in an e-mail.
In the five months since Ivan’s Sept. 16 landfall, the Insurance Department has received 3,500 complaints statewide about the industry’s handling of storm-related claims, said Ragan Ingram, an assistant commissioner with the agency. A total of about 200,000 Alabama claims are linked to Ivan, Ingram said.
Although about 95 percent of those claims have been resolved, he said, a recent spike in complaints paired with a stagnant settlement rate led the agency to act. The mandate was effective upon release.
If insurers aren’t able to settle an Ivan-related claim by March 25, they must provide the department a report for each unsettled claim detailing their reason for not acting along with a timeline for resolution, according to the order.
Though the state department is not able to prosecute or fine businesses it regulates, the agency can revoke an insurer’s Alabama license.
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