Agreement Requires Re-evaluation of Disability Income Claims, Improvements to Claims Handling Practices and Payments of Fines
GARDINER –Insurance Superintendent Eric Cioppa announced Wednesday that the Maine Bureau of Insurance has reached a major multi-state settlement regarding the handling practices of disability income insurance claims by Life Insurance Company of North America (LINA), Connecticut General Life Insurance Company and CIGNA Health and Life Insurance Company (formerly known as Alta Health and Life). The settlement was reached through the coordinated efforts of Maine and four other state insurance agencies: California, Connecticut, Massachusetts and Pennsylvania.
“Coordinated examinations by Maine and other states showed that these three CIGNA companies were not using available information to appropriately process disability income insurance claims, and that their claims handling practices needed improvements,” Superintendent Cioppa said. “The companies are now re-evaluating certain claims and have so far set aside $48 million in reserves in the event additional benefits need to be paid. They have also set aside an additional $29 million for presently open claims.”
Cioppa outlined the requirements contained in the settlement agreement. The companies are required to:
· Enhance claim procedures to improve the claims handling process to benefit current and future policyholders.
· Establish a remediation program in which the companies’ enhanced claim procedures will be applied to certain previously denied or adversely terminated claims for residents of states whose insurance commissioners sign the settlement agreement.
· Participate in a twenty-four month monitoring program conducted by the insurance departments of the five states involving random sampling and on-going consultation.
· Undergo a re-examination upon completion of the monitoring period.
· Pay fines and administrative fees totaling $1,675,000.
The companies have set up a dedicated line for policyholders with questions on the claim re-evaluation process. That number is 1-855-625-5518. A copy of the full “CIGNA Regulatory Settlement Agreement” is available at www.maine.gov/pfr/insurance under “Featured Links.” Consumers seeking additional assistance with this issue or any other insurance questions should call the Maine Bureau of Insurance toll-free at 1-800-300-5000.