A.1208 S.5208 – Creates Insurance Consumer Advocate Office

This legislation, A.1208/S.5208, would create a new office of “insurance consumer advocate” within the Department of Financial Services (DFS). The New York Health Plan Association (HPA) opposes the legislation because it is unnecessary and will not provide consumers with any greater protections or assistance than currently exists.

The New York State Department of Financial Services already has a Financial Frauds and Consumer Protection Division. Within that division is the Consumer Assistance Unit (CAU), which is charged with investigating and mitigating consumer complaints. According to the 2019 Financial Frauds and Consumer Protection Report[1], in 2018 the CAU processed 35,966 insurance complaints and handled 1,296 insurance inquiries. DFS also operates a consumer hotline to assist consumers with questions and assist them with complaints.

In addition to DFS’s consumer assistance program, the New York State Attorney General’s Office (AG) maintains a Health Care Bureau (HCB), part of the AG’s Social Justice Division, which works to “protect and advocate for the rights of health care consumers statewide.” The HCB operates a toll free helpline, assists consumers who have complaints and investigates individual complaints. The Health Care Bureau’s 2018 Annual Report[2] said that during that year, helpline advocates handled 1,961 consumer complaints and provided another 2,389 consumers with information or referrals.

The legislation would also charge the new consumer advocate’s office with review of rate applications, participation in public hearings, and the review and recommendation of legislation related to improving the insurance process for consumers. These are all functions that already fall under the purview of DFS, further underscoring the redundancy that this office would create.

For these reasons, HPA urges you to reject A.1208/S.5208.

[1] https://www.dfs.ny.gov/system/files/documents/2019/04/ffcpd_annualrep_2018.pdf

[2] https://ag.ny.gov/sites/default/files/health_care_bureau_annual_report_2018.pdf