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Digital EditionWhen the Insurance Department Comes Knocking: How Producers Should Respond to Consumer Complaint Inquiries
Mark B. Robinson is founding partner of Michelman & Robinson, LLP, a national law firm headquartered in Los Angeles. He is an insurance industry authority, who primarily represents retail brokers and agents, and a recognized authority on regulatory issues. Mark can be contacted at [email protected].
Receiving a letter from a Department of Insurance (DOI or Department) about a customer complaint can stop even the most seasoned insurance broker in their tracks.
It’s natural to ask: “What did I miss? Am I in trouble? Could this affect my license?”
But more often than not, these inquiries are procedural, not punitive. With the right approach—measured, thorough, and informed—agents and brokers can respond in a way that satisfies regulators, clarifies misunderstandings, and protects themselves and their clients.
Understanding the Inquiry: It’s Not Always About You
Many DOI inquiries begin not because of suspected misconduct, but because the broker is part of the policy’s procurement chain. Departments routinely loop in every person and entity that touched a transaction—from producers and general agents to
surplus lines brokers and carriers—to build a complete picture of the consumer’s experience.
This doesn’t mean wrongdoing is presumed. It means the regulator is doing due diligence. Knowing this can help brokers shift from defensiveness to preparedness.
Regulatory Authority and Scope
Insurance departments wield broad investigatory powers under state codes and regulations. Consumer complaints can be filed with just a few clicks or a phone call, and once submitted, the DOI is obligated to review and, where appropriate, act.
Common complaint categories include:
- Delays or denials in claim resolution
- Alleged wrongful policy cancellation
- Misrepresentations in marketing or sales
- Mishandling or misappropriation of premiums
- Disputes over rates or charges
- Undisclosed fees
- Poor customer service
Once received, complaints are assessed. If the consumer’s grievance suggests a possible legal or regulatory violation, the Department may deem it “justified,” warranting further inquiry or escalation.
A “justified” finding can result from:
- Conduct that violates insurance laws or regulations
- Deviations from filed rates or underwriting guidelines
- Departures from internal rules or service standards
- Breaches of contract or policy terms
- Failure to timely respond to DOI inquiries
The upshot: every interaction tied to a policy—marketing, quoting, issuing, servicing, and even offhand communications—can come under scrutiny.
The Response: Precision, Proof, and Professionalism
DOI complaint letters typically ask brokers to:
- Directly address the consumer’s concerns
- Provide a narrative of the transaction
- Attach relevant documentation
- Offer a premium and fee breakdown
When responding, time is of the essence, as the response deadline is fixed and rarely extended. Upon receipt of a Department letter, producers should immediately review the correspondence and the complete client file, checking the latter for completeness. If materials appear to be missing, carriers or intermediaries should be promptly contacted to fill in the gaps.
Where multiple parties are involved, coordination is key. Agents or brokers in receipt of a complaint letter must ensure their facts—especially around premium allocation, endorsements, cancellations, or fee disclosures—align with those of the relevant general agent or carrier. Divergent responses invite follow-up questions or worse.
Also critical is the need to stick strictly to the issues raised by the given complaint. Should it involve undisclosed fees, the producer should cite and attach the relevant fee agreement or quote. If the complaint touches on customer service, the agent or broker should document every attempt made to resolve the issue, referencing dates, communications, and file notes. As a rule, producers are advised to keep the tone professional and the response concise.
What Not to Say
When on the wrong side of a DOI letter, agent and brokers would be wise to avoid over-explaining, speculating, or introducing unrelated matters. Why? Irrelevant details can create unintended liability.
Also, producers should never admit fault in the response. Even a well-intentioned apology or offer to make things right can be construed as a concession of liability—something both regulators and plaintiff attorneys may exploit. Worse, such statements can trigger coverage exclusions under many professional liability policies.
Of course, if an issue presented by way of a complaint is complex or involves potential exposure, an insurance regulatory attorney should be consulted before responding. A seasoned legal professional can help frame the facts in a way that’s cooperative but protective.
Final Thoughts
Responding to a DOI complaint isn’t about blame—it’s about clarity. Regulators want the truth, not theatrics. That being said, if agents and brokers approach the process with professionalism, precision, and a full understanding of their obligations, they’ll not only comply—they’ll demonstrate the integrity that defines a top-tier producer—a win for everyone involved. &
