Aetna Inc.’s first-quarter profit fell 13 percent as expenses rose and the health insurer faced a tough comparison to year-ago earnings that included a one-time gain.

The Hartford, Conn., company’s adjusted earnings missed Wall Street expectations, and its shares tumbled more than 7 percent in premarket trading.

Aetna said Thursday last year’s first quarter included a gain of $112 million after taxes because claims left over from previous quarters came in below expectations. That meant the company could free up money it had held in reserve to pay those claims. There was no significant gain like that in this year’s quarter.

Lower-than-expected growth in health care use has helped insurers for the past several quarters, and it was a factor behind the 73 percent earnings gain Aetna recorded in last year’s fourth quarter. But insurers have said they expect use to return to more normal levels this year, as consumers pinched during the recession start to feel comfortable about their finances.

Aetna competitors WellPoint Inc. and UnitedHealth Group Inc. both said recently that they saw modest growth in use during the first quarter, but increases in the price of care were the main factor behind their medical costs.

Overall, Aetna said net income fell to $511 million, or $1.43 per share, in the three months that ended March 31. That’s down from $586 million, or $1.50 per share, a year ago.

Adjusted earnings, which exclude items like capital gains, were $1.34 per share in the latest quarter. Analysts surveyed by FactSet expected, on average, adjusted earnings of $1.40 per share.

Revenue excluding capital gains climbed 6 percent to $8.86 billion. Analysts expected revenue of $8.61 billion.

The amount Aetna paid in medical claims, its largest expense, climbed more than 9 percent to $5.86 billion in the first quarter. An Aetna spokeswoman said the big jump was partially due to the relatively low total from last year’s quarter.

Aetna is the third-largest commercial health insurer based on both enrollment and revenue, trailing WellPoint and UnitedHealth. Health insurance is Aetna’s main product, but the company also sells dental, group life and disability coverage.

The insurer’s medical enrollment, which includes commercial health insurance and people covered by Medicare and Medicaid, fell 3 percent to 17.9 million in the quarter compared to the end of last year. Chairman and CEO Mark Bertolini said in a statement company officials were confident in their ability to raise that total this year to 18.2 million members, which would represent a slight drop from the end of last year.

 Aetna reaffirmed its forecast for 2012 adjusted earnings, which exclude capital gains or losses, of about $5 per share. Analysts expect, on average, earnings of $5.15 per share.

The company’s performance was disappointing because investors had high expectations that it would beat Wall Street forecasts and raise its full-year outlook, Bernstein analyst Ana Gupte said in a research note.

Aetna shares dropped $3.74, or 7.6 percent, to $45.62 in premarket trading. Its shares have traded in a 52-week range of $33.34 to $51.14.

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A first-of-its-kind study into the impact of not using turn signals estimates that neglect of the device helps cause millions of crashes a year. The report was authored by an executive from a company that holds patents on technology that automatically operates turn signals for drivers

The Society of Automotive Engineers (SAE) recently published a report that studied 12,000 vehicles observed either using a signal or neglecting to use one. According to the report, motorists fail to use their signal when changing lanes 48 percent of the time. When turning, drivers neglect their turn signal 25 percent of the time.

Researchers extrapolated their data to conclude that “the collective result of turn-signal neglect is as many as 2 million crashes per year” and drivers ignore using their signals when they should be using them 2 billion times a day.

“Each incident of neglect elevates the risk of a multivehicle crash,” researchers said in a statement.

The report’s authors framed signal neglect as a public safety issue in the same vein as distracted driving, citing federal statistics that show driving distracted leads to 950,000 collisions annually.

The SAE report was published toward the end of April, billed by federal officials as National Distracted Driving Awareness Month. Coinciding with political events like a national summit on distracted driving in Texas, several studies were published last month, including two from State Farm, focusing on distracted driving and the hold it has on younger motorists. Other federal statistics find that teenage drivers are more likely than other age groups to be involved in fatal crashes where distraction is reported.

Parents who want to obtain cheap car insurance for young drivers in their households will have a hard time doing so, since inexperienced motorists are charged higher insurance premiums. Last month’s reports on distracted driving added to a growing pile of research linking younger motorists with riskier roadway habits.

But young or not, all motorists will have a hard time finding lower insurance rates if they have marks on their driving record like collisions and accidents. More at-fault crashes on your record, whether they happened because you failed to use signals or drove while distracted, will inevitably lead to higher insurance rates. Authors of the SAE report said that solely focusing on crash statistics shows that turn-signal neglect “is actually a more significant safety issue” than distractions behind the wheel.

“The turn signal is one of the very original automotive crash prevention devices, and this simple driver-to-driver communication device remains extremely effective, but only when it is accurately displayed as required by law,” Richard Ponziani, president of RLP Engineering, said in a statement. “The turn signal can no longer be considered ‘optional,’ and all drivers have an ongoing duty to use it, just as they have a duty to stop at a stop sign or at a red light.”

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The state Congress in Oklahoma is split on legislation that would allow police to check vehicles they suspect don’t have the insurance coverage required by law through a state database.

The measure, HB 2525, passed the Senate by a 29-8 vote on April 24. It had failed that same day by an 8-36 vote before being reconsidered.

The version of the bill ultimately passed by senators amended the proposal’s language, removing a “probable cause” clause within the legislation and allowing police to check the presence of a valid policy on a vehicle through the database at any time.

But representatives in the state House rejected senators’ amended version on April 30, calling for a conference between the state House and Senate. The conference is currently assigned to the House Committee on Public Safety, Judiciary and Military Affairs.

Supporters say HB 2525 would make use of the online database that has existed for years and allow authorities and state officials to instantly verify that a motorist has the proper coverage in place.

“My constituents have made it clear: They want the uninsured vehicles off of the road,” Rep. Steve Martin (R-Nowata) said in a statement. “[N]ow more vehicles will be cited or impounded without the need for the driver to break other laws at the same time.”

State authorities currently cannot stop a car and issue a citation for lacking an insurance policy “based solely on noncompliance with the online verification system,” according to a legislative summary. They must first have a driver pulled over with the intent to issue a separate citation before checking on coverage status.

Martin, who authored the bill, said that current law ties the hands of the authorities “because the knowledge that a vehicle does not appear to comply with the law is not considered a ‘probable cause for a stop.’”

“The law enforcement officer has to allow the vehicle to proceed while knowing there is a very high probability that it is uninsured,” he said.

Given the costly penalties, uninsured motorists should compare auto insurance quotes online or through an agent to get the minimum amount of coverage to avoid expensive encounters with the authorities. If the bill passes, the need for insurance will be heightened as police get wider discretion in issuing tickets.

The total cost of a citation for driving without coverage in Oklahoma, including court costs and fees, is $211.50, according to the summary, which also stated the potential for a revenue increase from an anticipated rise in citations, should the legislation become law.

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Allstate released its first-quarter financial statement Wednesday, which showed that the nation’s second-largest auto insurer saw rising profits when compared with both the previous quarter and the first quarter of 2011.

According to the earnings data, Allstate’s profits are up about 46 percent from the same period last year, jumping from $524 million up to $766 million.

The positive year-over-year results can be at least partly attributed to a 22 percent reduction in the amount the company lost on catastrophic claims during the first quarter, as well as to a 3.3 percent increase in revenues, which rose to $8.36 billion in the first quarter of 2012. Investment income was also up about 3 percent, increasing by $29 million.

The company also saw a large year-over-year jump in underwriting income, which went from $284 million up to $313 million, a 59 percent increase.

Allstate CEO Thomas Wilson said in the company’s financial statement that premiums were up because of the company’s purchase of Esurance, hikes in homeowners insurance premiums and “growth in emerging businesses.” Premiums would have been higher, however, if it weren’t for fallout from New York and Florida auto policyholders after the company raised rates in those states. As a result, total auto premiums declined 1.2 percent between the first quarters of 2011 and 2012.

Looking forward, the company said its underwriting results may be hurt by rising frequency and severity of auto insurance claims. The size of claims has been driven up by growth in medical and litigation costs and “inflation in auto repair costs, auto parts prices and used car prices,” the company said.

If the short-term rise in claims frequency becomes a long-term development, it “may not be sustainable.”

A report by the Wall Street Journal this week portrayed Allstate as struggling to maintain premiums and its spot as one of the top five insurers in the nation.

The report, which was sparked by the leaking of a confidential Allstate presentation, indicated that “The number of new customers buying car insurance from Allstate Corp. began ‘rapidly declining’ in the second quarter of last year,” and that the company has been scurrying to reverse the trend.

Potential customers calling to compare auto insurance quotes from the company were down about 30 percent last July, according to the report.

According to data from the National Association of Insurance Commissioners (NAIC), Allstate still has about $17.45 billion worth of auto insurance premiums in place as of April 9, 2012, making it the second-largest car coverage provider in the country. The company’s national market share is 10.32 percent, according to the NAIC.

To read the experiences of current and former Allstate policyholders, readers can find user-submitted Allstate auto insurance reviews online.

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Recently released Illinois rate filings show that consumers with private auto policies at major insurers Allstate and GEICO will see higher rates in the coming months.

Drivers may be trying to find cheap car insurance from other providers after these changes take effect, although the changes will vary from customer to customer depending on a number of factors, including where they live and discounts they might currently be enjoying.

Allstate Increases Effective This Month

Three companies under the Allstate banner reported increases to auto liability that will go into effect May 17:

–Allstate Fire and Casualty will see a 9 percent increase.

–Allstate Insurance will see an 8 percent increase.

–Allstate Property and Casualty will see a 5.6 percent increase.

Allstate did not report any changes to physical damage coverage.

Renewing GEICO Customers Will See Higher Rates in June

GEICO announced rate changes for four of its companies in their most recent filings in Illinois, all of them which will be effective on May 10 for new customers and June 25 for renewing policyholders.

GEICO Casualty will hike auto liability by 5.3 percent. The auto liability increase at GEICO General and at Government Employees Insurance Company will be 4.9 percent.

GEICO Indemnity will increase auto liability by 3.1 percent but will also decrease physical damage coverage by 4.7 percent.

Decreases Reported at Other Companies

In the latest filings, several insurers announced rate drops in both physical damage and auto liability coverage.

Madison Mutual reported decreases of 2.8 percent and 3.1 percent to its auto liability and physical damage coverage. New customers saw the changes in April and renewing customers will see them June 1.

Another insurer with comparable premium volume is Interstate Bankers Casualty, which instituted new rates in April that represented a 2 percent decrease for both auto liability and physical damage.

In the filings, American Alliance posted planned decreases of 4.1 percent to auto liability and 5.5 percent to physical damage that will go into effect June 9 for renewing customers. The new rates went into effect April for new business.

Conifer reported a 3.8 percent drop in rates for auto liability and an 8.2 percent reduction for physical damage coverage that goes into effect on June 12 for renewing policyholders.

Effective in May for all business, United Automobile will decrease rates for auto liability by 0.5 percent and physical damage by 1.5 percent.

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Gov. Rick Scott signed off on a bill reforming Florida’s auto insurance system Friday, finalizing a contentious debate around the now-approved law that overhauls how the state compensates providers and policyholders for crash-related injuries.

Legislators passed the reform bill in early March by an 80-34 vote in the state House and a 22-17 vote in the state Senate. That compromise bill followed battles in both state chambers over how to improve the state’s personal injury protection (PIP) coverage system that reimburses policyholders for post-crash medical expenses regardless of who was at fault for the collision.

The law’s proponents say it will save taxpayers money because it will reduce the rate of insurance-related crime, and insurers will, in theory, pass savings from reform onto drivers who search for Florida car insurance with lower premiums.

Opponents say that the reform measure severely undercuts the value of PIP coverage by restricting the amount that can go to treating nonemergency medical conditions to a total of $2,500, barring massage therapists and acupuncturists from receiving PIP payments and covering only treatments that start within the first 14 days of a crash.

?The governor signed the bill into law at an event in Jacksonville, Fla., saying “I am glad to do my part in keeping the cost of living low in Florida.”

The governor’s office cited statistics from state regulators showing that the number of crashes in the state declined as the amount of PIP payments increased 66 percent in 2006-10.

“These claims have caused auto insurance premiums to burden Florida families,” the governor’s office stated in a release coinciding with the signing ceremony.

New Conditions for PIP Medical Treatment

The new law institutes reforms that tighten restrictions on the kind of medical treatment a person receives under PIP coverage.

Previously, PIP covered up to 80 percent of medical expenses, up to 60 percent of lost income and up to a $5,000 death benefit, up to the policy limits. Reform supporters said this setup was too wide, leading to a rising number of phony claims and, ultimately, higher insurance premiums for everyone in the state.

Medical care providers previously covered by the state’s no-fault coverage included acupuncturists, massage therapists and other nonemergency medical professionals.

The law now eliminates services like massage therapy and acupuncture from benefits eligibility, requiring specific accreditations of facilities, hospitals and physician-owned clinics where policyholders can receive PIP-covered medical treatment. The law also requires policyholders to receive their initial treatment within the first 14 days after a crash if it is to be covered.

The newly approved reform measure adds a clause requiring that medical expenses covered up to the $10,000 PIP limit be related to an “emergency medical condition,” defined within the law as an injury that could lead to death or serious impairment or dysfunction if left untreated.

Treatment of nonemergency medical conditions are only covered up to $2,500.

The law also gives judges the power to review the fee amounts charged by attorneys in PIP-related cases “to ensure that each attorney doesn’t overinflate the hours or amount of skill involved and represents reasonable legal services,” according to a statement from Gov. Scott’s office.

Also, health-care professionals found guilty of PIP-related crimes will have their license suspended for 5 years and won’t be able to be reimbursed for PIP-related services for 10 years.

Gov. Rick Scott and the bill’s supporters claim that cost saving will really come from cutting back on insurance crimes. The new law does so by requiring long-form, post-crash police reports more often and allowing insurers a larger window to investigate claims that they find to be suspicious.

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Officials at the Connecticut Insurance Department announced yesterday that they recovered over $1 million in the first quarter of 2012, with $137,297 of that amount going back to auto policyholders who had disputes with their carriers.

In the first three months of 2012, the department recovered $808,000 related to about 1,600 complaints and inquires from consumers. Also, more than $375,000 in total fines were charged to companies that broke rules including delays in claim payment, according to the department. The fines were returned to the state budget for general use.

Regulators resolve complaints from consumers who feel their insurer acted improperly, and most complaints have to do with claim denials or untimely compensation, according to data compiled by the National Association of Insurance Commissioners (NAIC).

Policyholders shopping for a policy can run an auto insurance comparison based on price and then go to state regulators’ websites to check out consumer-complaint listings for those insurers.

“If companies are not playing by the rules, we want to know about it,” Thomas B. Leonardi, the department’s commissioner, said in a statement. “Our examiners have extensive expertise to help policyholders navigate the claims process and get the money they are rightfully owed.”

Connecticut regulators recovered about $6.75 million last year, according to the department.

Regulators in Pennsylvania announced last week that they recouped $3.4 million for taxpayers in the state in the first quarter of 2012, coming from more than 3,200 complaints and inquires.

Last month, regulators in New Jersey announced that they recovered $32 million from banks and coverage providers, a 50 percent increase from the amount of funds recovered the previous year.

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Regulators in Pennsylvania announced this week that they recovered $3.4 million in restitution for consumers in the first quarter of 2012.

The recovered funds come from 3,211 written consumer complaints and inquiries submitted during that time and 27 enforcement actions. State regulators also collected $71,000 in fines and penalties, according to a department release.

Regulators took action against both large insurers and individually licensed people, reporting that they suspended or revoked 14 licenses and put 11 licenses under probationary supervision.

“Action is taken after an investigation reveals violations of Pennsylvania laws or regulations, or after the completion of a market conduct examination,” the Pennsylvania Insurance Department stated in its release.

State regulators are usually the last resort in resolving issues between insurers and drivers. Customers holding policies with cheap car insurance companies are pleased with lower rates and premiums. But they can find problems with compensation when they file claims.

Claim denials and delays made up more than half of all complaints filed with regulators from 2009-11, according to data collected by the National Association of Insurance Commissioners (NAIC).

Other regulatory reports publicized this year showed that California, Michigan, Georgia, Montana, Ohio and North Carolina recovered a total of almost $150 million in 2011 for consumers by resolving similar disputes.

Earlier this month, regulators in New Jersey reported that they recouped $32 million for consumers in the state last year, representing a 50 percent jump in funds recovered from insurers and banks.

Policyholders looking for the best quality insurer can refer to state regulators’ websites, where reports are regularly published on the complaints filed on each insurer.

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A recently published J.D. Power and Associates study of satisfaction with the auto insurance claims process found that, since the last survey, customers have become significantly less satisfied with interactions with insurers upon first reporting vehicle damage.

Motorists can reference J.D. Power’s satisfaction study, the company’s insurer ratings and rankings of consumer complaints provided by state regulators when they compare auto insurance companies on customer service before making a purchase.

Overall customer satisfaction dropped 1.3 percent, or 13 points, in the study from the last quarter, according to J.D. Power, and much of the decline was due to a 19-point decrease in satisfaction during the “first notice of loss.”

The process of repairing damaged vehicles left customers more disgruntled, with satisfaction with this process dropping 15 points. Customers were also less satisfied with service interaction and appraisal, which both fell 16 points each.

But the study found that some of the problem may be attributed to the customers themselves, with 47 percent of claimants waiting for more convenient times and 20 percent waiting for a weekend or holiday to bring in their cars for repairs. Compared with last quarter, that meant adding an extra day and a half on average to get a car to a repair shop.

Those waiting customers tended to be those who reported lower satisfaction with the overall process.

“This suggests insurers need to do a better job of managing customer expectations for claims processing and vehicle repair times,” Jeremy Bowler, senior director of the insurance practice at J.D. Power, said in a statement.

The time it takes to repair vehicles increased almost a full day from last quarter, from 15 days to 15.8 days, but researchers linked nearly half of the increase to customers’ putting off bringing the car into the shop.

The study, which analyzed more than 3,700 responses from policyholders who had filed a claim in the last six months, surveyed respondents on their satisfaction with:

For both repair and total loss claimants, satisfaction with settlement was key in a customer’s overall experience, according to researchers.

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Louisiana legislators passed two insurance-related bills in the state House today, one that allows electronic ways of proving coverage and the other that allows police to tow uninsured vehicles.

HB 1130 got heavy support from representatives today with a 94-0 vote that sends the bill to the state Senate for further consideration. The legislation would allow drivers to use a mobile electronic device to display proof of a policy for authorities once they buy auto insurance coverage.

Electronic Proof Legislation Popular for Politicians

Louisiana is one in a long line of states trying to modernize the ways motorists can prove coverage.

Pieces of legislation permitting electronic means of showing financial responsibility are in different stages in different states across the U.S. and have proved to be popular among legislators:

– California: AB 1708 got unanimous approval in an Assembly Committee last week and is currently in the Assembly Appropriations Committee.

– Idaho: SB 1319, passed by a 33-0 February vote in the state Senate, was signed by Gov. C.L. “Butch” Otter late last month, making the state the first to enact such a law.

– Arizona: HB 2677 was signed by Gov. Jan Brewer late last month after receiving unanimous support from both the state House and Senate.

Louisiana Legislators Consider Other Bills

HB 1053 allows police to immediately tow cars of drivers who cannot provide evidence of insurance, lifting a current provision prohibiting authorities from impounding vehicles of first-time violators of the state’s mandatory insurance law. Current law only allows police to tow cars of uninsured motorists on the second violation or later. The bill was presented in the House chamber today and passed by a 82-7 vote, sending it to the state Senate for further consideration.

Legislators in the state are also considering another bill, HB 713, which would require that police give advance notice to the public whenever they set up checkpoints to verify proper inspection stickers and tags. Current law already requires that police issue public warnings before they establish checkpoints for insurance, seat-belt use and driving under the influence.

HB 713 was moved by a 61-28 vote out of the state House early this month and is currently in the Senate Committee on Transportation, Highways and Public Works.

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