Maine Protects Insurance Consumers by Reaching Settlement with Three CIGNA Companies

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. 

 

Maine Office of Securities Issues Investor Advisory on Private Placement Offerings

GARDINER – In advance of a federal rule to allow advertising of high-risk and potentially fraudulent private placement offerings, Maine Securities Administrator Judy Shaw issued an advisory today informing investors about the risks associated with these offerings.  The advisory is available at www.maine.gov/pfr/securities/Private_Placements_Maine.pdf.

Private placement offerings allow companies to raise money by selling stocks, bonds, and other instruments; however, these offerings may be exempt from federal securities registration requirements.  As a result, this exemption permits the raising of capital without having to comply with disclosure and consumer protection requirements that apply to public securities offerings. 

Because exempt private placement offerings are not reviewed by regulators, they have become a haven for fraud.  According to the most recent statistics from the North American Securities Administrators Association, private placement offerings are the most frequent source of enforcement cases conducted by state securities officials.

“The registration exemption has been used by legitimate small businesses as an important source of capital, and state securities regulators want those businesses to thrive and create jobs without unnecessary regulatory impediments,” said Governor Paul R. LePage.  “However, a healthy private placement marketplace requires informed investors who feel adequately protected.”

Currently, the exemption available under the Securities Act of 1933 does not permit general solicitation or advertising of private placement offerings.  The JOBS Act of 2012 directed the Securities and Exchange Commission (SEC) to lift this ban, as long as sales are limited to “accredited” investors–people who have sufficient wealth or access to information that would presumably allow them to make fully informed investment decisions.  The SEC is finalizing its proposed rule.

“Unscrupulous promoters may take advantage of these new rules, as they will now be allowed to offer securities through direct mail, cold calls, free lunch seminars and television or radio commercials,” said Securities Administrator Shaw.  “The Office of Securities is taking steps to help Maine investors avoid being lured into high-risk or fraudulent investments when the ban on general solicitation of private placement offerings is lifted.” 

Shaw noted that the Office’s advisory includes information on the risks associated with private placement offerings and tips on how to protect yourself when considering such an offering.   More information about the risks associated with private placement offerings is available by contacting Office of Securities toll-free in Maine (877) 624-8551 or (207) 624-8551.

In Advance of Veterans Job Fair in Augusta, Governor and State Agency Highlight Initiative to Make Occupational Licensing Easier for Veterans

AUGUSTA – In advance of a major job fair for veterans and others in Augusta, Governor Paul R. LePage and Commissioner Anne Head are highlighting an initiative at the Department of Professional and Financial Regulation (DPFR) to make occupational licensing in several professions quicker and easier for veterans with relevant military training and experience.

Governor LePage and Commissioner Head are also encouraging veterans, members of the National Guard and the Reserves, and others seeking employment to attend the “Hiring Maine’s Heroes Job Fair” tomorrow, March 20^th, at the Augusta Armory.   It will feature special programs and information about employment opportunities.  DPFR will staff a booth to provide details about the Department’s ongoing effort to assist veterans in applying military experience toward occupational licensing.  The job fair will take place from 10:00 a.m. to 3:00 p.m. at the Augusta Armory, 179 Western Avenue.  The event is co-sponsored by the Employer Support of the Guard and Reserve (ESGR) and the Augusta CareerCenter.

The Governor has made it a priority to help Maine’s veterans–encouraging state agencies to provide assistance to those who served our nation in the military.  One such effort by the Governor and DPFR has been the implementation of Public Law Chapter 603, signed by the Governor last year.  The law is intended to ensure that veterans are given full credit for applicable military training and experience when they apply for an occupational license from the Office of Professional and Occupational Regulation at DPFR.

“The people of Maine owe a debt of gratitude to those who have served,” Governor LePage said.  “We have an obligation to recognize their knowledge and skills whenever possible and appropriate, and our economy needs their contributions.  I’m pleased to have worked with the Department and Legislature to make licensing easier for qualified veterans.”

More information can be obtained by calling DFPR at 207-624-8678.  Veterans are encouraged to contact DFPR before applying.  Military documentation that may be needed includes:

• Copy of a DD Form 214, Report of Discharge; and
• Copy of DD Form 2586, Verification of Military Experience and Training (VMET).

“The Department is committed to working with Maine veterans to make sure their skills and talents are fully evaluated and appreciated,” Commissioner Head noted.  “Whenever we can give veterans credit toward licensing requirements, based on their military experience, we intend to do so.  It’s in the best interest of veterans, our business community, and consumers seeking the services of electricians, plumbers and other professionals.”

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Maine’s Office of Securities Issues Consumer Alert

“Profitable Sunrise” is Unregistered, Questionable Scheme

GARDINER — Maine Office of Securities Administrator Judith Shaw has issued an alert to all Maine investors regarding a foreign-based company known as “Profitable Sunrise,” which has attempted to sell unregistered investment contracts through multiple online sources—prompting serious concern and action by securities officials throughout the country.

Profitable Sunrise claims that their investment model allows consumers to earn up to 2.7% interest per day.  Investments are purportedly used to provide short-term loans to companies at 3% interest per day.  The company’s website also states that investors may earn money by recruiting others through a referral program that pays 5% of deposits generated from recruits.

“Like many high-yield investment schemes, this company recruits investors by offering significant returns and claiming that there is no risk,” said Securities Administrator Shaw.  “These companies often make promises they have no intention of keeping.”

Shaw emphasized that neither Profitable Sunrise, nor its investment products, is registered in Maine as required by the Maine Uniform Securities Act.

“Increasingly, scams rely on the internet as a forum for perpetuating fraud,” Shaw noted.  “Online sources provide a quick way for criminals to access millions of people and to prey upon members of identifiable groups, such as religious communities, retirees, and those who are desperate for quick income.”

High-yield investment programs often have common red flags of fraud that consumers should be looking for—unusual, unsustainable yields; lack of information regarding the investment operator; unclear methodology for achieving returns; off-shore operations; incentives to recruit new investors; and online advertisements containing typographical errors and grammatical mistakes.

Consumers who have invested with Profitable Sunrise are encouraged to contact the Office of Securities at (877) 624-8551 (toll-free in Maine) or (207) 624-8551.  Shaw also urged consumers to contact Maine’s Office of Securities before investing to obtain general information about investment professionals and products, including online investment or business opportunities.  More information is available at www.investors.maine.gov.

The Office of Securities is part of the Department of Professional and Financial Regulation, which encourages sound business practices through oversight of insurers, financial institutions, creditors, investment providers, and numerous professions.  More information is available at www.maine.gov/pfr.  

 

 

Passport Day CANCELLED — March 9th

Attorney General Mills Warns Maine Medicare Recipients of Scam

AUGUSTA – Attorney General Janet T. Mills is warning consumers about recent reports of calls from individuals claiming to represent Medicare.

There are reports from Maine Medicare recipients who have received phone calls claiming to be from Medicare.  The callers claim Medicare is issuing a new Medicare card and asks for the consumer’s Medicare number, the name of their financial institution and their financial routing and account numbers.

Medicare consumers who provide this information are advised to review their Medicare statements carefully for the next year and contact 1-800-MEDICARE immediately if anything questionable appears on their statements.  Consumers should also notify their financial institution if their account information has been compromised.

“Mainers can protect themselves by never giving any personal information to anyone over the phone,” said Attorney General Mills.

If you think you have experienced a Medicare scam, call the Attorney General’s Consumer Protection Hotline at (207) 626-8849.

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Maine Ranked in Top Ten for Affordability of Homeowners and Personal Auto Insurance

GARDINER – Maine’s Insurance Superintendent Eric Cioppa announced Friday that the National Association of Insurance Commissioners (NAIC) has released two reports showing an improvement in Maine’s national ranking for two lines of property and casualty insurance: personal auto and homeowners. The NAIC shows Maine in the top ten, meaning the cost for these types of insurance is lower than in most other states.

“Maine’s auto and homeowners insurance rates are among the lowest in the country,” commented Superintendent Cioppa. “These results are signs of a healthy and well-functioning property and casualty insurance market.”

In their 2010 Homeowners Insurance Report, the NAIC provides data on market distribution and average cost by policy form and amount of insurance. Data was collected from insurance statistical agents or reported directly to the NAIC and includes countrywide and state-specific premium and exposure information for homeowners policies, as well as non-commercial dwelling fire insurance policies. For homeowners insurance, Maine is ranked 9^th nationally for 2010 (the most recent data evaluated by the NAIC), compared to 11^th in 2009.

The NAIC’s 2009/2010 Auto Insurance Database Report provides the average costs associated with personal automobile insurance nationwide. For personal auto insurance, Maine’s ranking improved from 6^th in 2009 to 5^th in 2010. The report includes state-by-state auto insurance data designed to provide necessary information and analysis to insurance regulators, consumers, and policymakers. The types of auto insurance coverage included are bodily injury and property damage liability (including no-fault), uninsured and underinsured motorist, medical payment, collision, and comprehensive.

More information is available from the NACI (www.naic.org).  Maine consumers and business operators with questions about auto, home, business or other lines of insurance are encouraged to contact the Bureau of Insurance by calling 1-800-300-5000 or sending a message to Insurance.PFR@maine.gov.

The Bureau of Insurance is part of the Department of Professional and Financial Regulation which encourages sound business practices through high quality, impartial and efficient oversight of insurers, financial institutions, creditors, investment providers, and numerous occupations to protect the public.

 

Fisher-Price recall due to risk of mold exposure

Fisher-Price Recalls to Inspect Rock ‘N Play Infant Sleepers Due to Risk of Exposure to Mold.

WASHINGTON, D.C. – The U.S. Consumer Product Safety Commission, in cooperation with the firm named below, today announced a voluntary recall of the following consumer product. Consumers should immediately inspect this product and stop using it if mold is found. Units currently in retail stores are not included in this recall to inspect.

Name of Product: Newborn Rock ‘n Play Sleeper™

Units: About 800,000 units

Importer: Fisher-Price Inc., of East Aurora, N.Y

Hazard: Mold can develop between the removable seat cushion and the hard plastic frame of the sleeper when it remains wet/moist or is infrequently cleaned, posing a risk of exposure to mold to infants sleeping in the product. The CPSC advises that mold has been associated with respiratory illnesses and other infections. Although mold is not present at the time of purchase, mold growth can occur after use of the product.

Incidents/Injuries: Fisher-Price has received 600 reports of mold on the product. Sixteen consumers have reported that their infants have been treated for respiratory issues, coughs and hives after sleeping in the product.

Description: This recall to inspect includes all Fisher-Price Rock N’ Play infant recliner seats called sleepers. The sleeper is designed for babies up to 25 pounds and is composed of a soft plastic seat held by a metal rocking frame. The product has a removable, fabric cover that is sold in 14 patterns and color palettes.

Sold at: Mass merchandise stores nationwide and online since September 2009 for between $50 and $85. Units currently in retail stores are not affected by this recall to inspect. Only products that show signs of mold after use by consumers are included in this announcement.

Manufactured in: China

Remedy: Consumers should immediately check for mold under the removable seat cushion. Dark brown, gray or black spots can indicate the presence of mold. If mold is found, consumers should immediately stop using the product. Consumers can contact Fisher-Price for cleaning instructions or further assistance. Cleaning and care instructions can also be found at http://www.service.mattel.com or by contacting the firm.

Consumer Contact: Fisher-Price; at (800) 432-5437, from 9 a.m. to 6 p.m. ET Monday through Friday, or online at www.service.mattel.com for more information.

Attorney General Schneider and Superintendent Lund Announce Settlements with Debt Management Companies

AUGUSTA — Attorney General William J. Schneider and Superintendent of the Bureau of Consumer Credit Protection William N. Lund jointly announced today that the State has entered into settlements with Legal Helpers Debt Resolution, LLC (“Legal Helpers”) and The Mortgage Law Group, LLP (“Mortgage Law”) that resolve the State’s concerns about their business practices under the Debt Management Services Act and the Unfair Trade Practices Act.

The companies operate as part of a large law firm located in Chicago, Illinois.  Legal Helpers was promoted as the largest debt resolution law firm in the country, with offices in 50 states, and Mortgage Law claimed to have a national reputation for representing homeowners in danger of losing their homes to foreclosure.  Neither company had an office in Maine, but had “partnerships” with several attorneys who were licensed in Maine.  New clients were enrolled by non-law office “strategic alliance partners” that also provided client services for the two companies.

Debt management service providers, including those who claim to arrange debt settlements and loan modifications, are regulated by the Bureau of Consumer Credit Protection.  Any attorney who is licensed to practice law in the State of Maine is exempt from registration as a debt management service provider unless the attorney’s exclusive activity is providing debt management services.  Superintendent Lund did not accept the companies’ claims that their partnerships with Maine attorneys entitled them to a legal exemption, and insisted that they register, which they refused to do.  The Attorney General contended that many Maine consumers never met or spoke with an attorney when they enrolled in the programs, and were misled by claims about their benefits.  Both Legal Helpers and Mortgage Law denied that they have violated any Maine laws.

Under the settlements, the companies agreed not to enroll any more Maine consumers in their programs, and will stop charging monthly fees to consumers who are still receiving their services.  In addition, the companies paid $250,000 in restitution which will be equitably distributed by the Attorney General to the more than 300 Maine consumers who enrolled in their programs.  An additional $15,000 has been paid by the companies to reimburse a portion of the state’s investigative and administrative expenses.

“These settlements send a strong message to others in the debt relief business that the State of Maine will not tolerate those who take advantage of Maine consumers in financial distress,” said Attorney General Schneider.

Superintendent Lund agreed, and said, “The Legislature took steps to protect Maine consumers by requiring debt management and credit counseling companies to obtain licenses and post surety bonds in order to conduct business in our state.  We urge Maine residents to verify the license status of any companies before doing business with those offering debt relief, since Mainers lose tens of thousands of dollars each year to unlicensed, out-of-state companies.”

Consumers are encouraged to contact the Bureau of Consumer Credit Protection to check the license status of debt management companies, and any disciplinary history in Maine, by calling 1-800-332-8529 (in-state) or 207-624-8527.  The Bureau also maintains a roster of licensed Debt Management Service Providers at www.Credit.Maine.gov, under the “Who we regulate” link on the homepage.

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Superintendent of Insurance Highlights Final Days of Medicare Open Enrollment Period

Tips to Protect Consumers While Making Important Decisions

 

GARDINER - Each year, Medicare beneficiaries can evaluate and change their health coverage options during open enrollment.  Medicare’s 2013 open enrollment period for Medicare Part D (prescription drug coverage) and Medicare Advantage began October 15 and runs through December 7, 2012.  New benefit choices will take effect January 1, 2013.

“Even if you are happy with your current plan, it is still a good idea to look at your options,” recommended Maine Insurance Superintendent Eric Cioppa. “For most current participants, this will be the only time in which they can make coverage changes, and many plans are changing.  A little extra research could result in significant savings.”

In 2012, Maine had approximately 276,460 eligible Medicare beneficiaries according to Henry J. Kaiser Family Foundation’s state health data report, representing about 21% of Maine’s population.

There are many resources available to assist Mainers with their Medicare plan choices.  Free Medicare information is available from trained health insurance counselors throughout Maine through the State Health Insurance Program (SHIP).

SHIP Counselors do not sell insurance or recommend policies and their services are confidential. Maine’s five Area Agencies on Aging and Legal Services for the Elderly can provide SHIP counseling services. To contact a local Area Agency on Aging, call 1-877-353-3771, and to contact Legal Services for the Elderly (voice & TTY) call 1-800-750-5353 or visit www.mainelse.org.  Consumers can also contact the Office of Aging and Disability Services, at 1-800-262-2232 (TTY – Maine relay 711).

Each fall, Medicare beneficiaries receive the Medicare & You Handbook, and program comparisons are available at www.medicare.gov or by calling 1-800-MEDICARE (1-800-633-4227), 24 hours-a-day, seven days-a-week (TTY users can call 1-877-486-2048).

“This can be a confusing process.  We encourage consumers to ask for help soon and not wait until the end of open enrollment,” added Cioppa. “We also want Maine consumers to watch for abusive or aggressive sales tactics.”

Insurance producers marketing Medicare plans are subject to both state and federal regulations. Superintendent Cioppa offers the following tips for consumers to help ensure that they are protected while making these important choices.

1.      Make sure your salesperson is licensed.  Please contact the Bureau of Insurance to check the license status of the salesperson.

2.      Understand who you are talking to.  Medicare does not have “representatives” to solicit business, so be wary of any salesperson claiming to be one.

3.      Be wary of free meals.  Federal regulations prohibit offers of free meals for signing up for a plan or for listening to a Medicare sales presentation.

4.      Expect an appointment.  A Medicare salesperson cannot call you at home or go door-to-door unless you have given them permission to do so.

5.      Be wary of additional sales pitches.  Federal regulations prohibit the sale of additional insurance products (examples: life insurance or annuities) during any sales or marketing presentation for Medicare prescription drug or Medicare Advantage plans.

6.      Be careful with your personal information.  Make sure the person asking for your information is entitled to receive it.

7.      If you are uncomfortable, take advantage of the resources listed above.

The Bureau of Insurance is part of the Department of Professional and Financial Regulation which encourages sound business practices through high quality, impartial and efficient oversight of insurers, financial institutions, creditors, investment providers, and numerous occupations to protect the public. Consumers can reach the Bureau at www.maine.gov/insurance; by calling 800-300-5000 in state; or by writing to Bureau of Insurance, 34 State House Station, Augusta ME 04333.

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