CID: New Releases (05/22/2013) - Insurance Commissioner Announces Settlement With CIGNA over Disability Insurance Claims

{Connecticut Insurance Department}
Insurance Department
Thomas B. Leonardi
Donna Tommelleo
May 22th, 2013

Insurance Commissioner Announces Settlement
With CIGNA over Disability Insurance Claims
Connecticut Insurance Commissioner Thomas B. Leonardi today announced a regulatory settlement with the CIGNA Group over claims handling practices for long-term disability insurance. The Connecticut Insurance Department worked with regulators in California, Maine, Massachusetts and Pennsylvania to examine the claims procedures of CIGNA’s Pennsylvania-based subsidiary, 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).
“This regulatory action is intended to provide long-awaited relief for consumers who have a right to expect that their carrier will make good on contractual promises,” Commissioner Leonardi said.  “As regulators, we hold carriers accountable for adhering to laws and regulations of each state in which they conduct business. This settlement resulted from market conduct exams and encompassed issues of serious concern. It is a solid example of regulatory cooperation in protecting the policyholders of Connecticut and other jurisdictions.”
The companies are re-evaluating certain claims and have set aside $48 million in reserves in the event additional benefits need to be paid as well as $29 million in additional amounts for presently open claims.
This regulatory settlement requires the companies 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 also signed the settlement agreement.
  • Participate in a 24-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. Connecticut will receive $150,000 in fees to monitor compliance.
The companies have a dedicated telephone line for policyholders with questions on the claim re-evaluation process. That number is 855-625-5518
Here is a link to the Regulatory Agreement.
About the Connecticut Insurance Department: The mission of the Connecticut Insurance Department is to protect consumers through regulation of the industry, outreach, education and advocacy. The Department recovers an average of $4 million yearly on behalf of consumers and regulates the industry by ensuring carriers adhere to state insurance laws and regulations and are financially solvent to pay claims. The Department’s annual budget is funded through assessments from the insurance industry. Each year, the Department returns an average of $100 million a year to the state General Fund in license fees, premium taxes, fines and other revenue sources to support various state programs, including childhood immunization.
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Content Last Modified on 5/22/2013 4:01:29 PM