Further Information For Those Interested In The CIGNA Settlement
Prior to entering into the multi-state settlement with CIGNA, each state concluded a targeted market conduct investigation of CIGNA and its subsidiary practices within its jurisdiction. The DOI explained that market conduct investigations “are started when regulators notice a pattern of claims against one or more insurers which suggests that the insurer may be acting in a fashion which is detrimental to policyholders.”
The Division of Insurance made available a copy of the targeted market conduct report it had commissioned prior to settling with CIGNA. In Massachusetts, targeted market conduct examinations are conducted pursuant to Chapter 175 sec. 4. In this case, the examination and final report was prepared by the Boston law firm Rackemann, Sawyer & Brewster, on behalf of the DOI and presented to them on May 14, 2013.
In reviewing the report, it should be noted that the examination ultimately reviewed a total of sixty-three claim files involving Massachusetts policyholders. The following table taken from the report, identifies the distribution of the claims examined by category for both the population and the sample.
|Population Size||Sample Size|
|Closed LTD Claims||515||41|
The Seven Major Areas of Concern Identified In The Report
The first area of concern involving CIGNA’s DI claims handling process in Massachusetts involved the imposition of standards inconsistent with the policy provisions. More specifically, “…the examiners noted a number of instances in which the Companies wrote denial or termination letters to claimants (or their attorneys) that evaluated the claimant’s condition and/or medical records against standards that may be inconsistent with the standards set forth in the Companies’ DI policies.” The report noted that this could constitute an unfair claim settlement practice pursuant to Massachusetts General Law 176D sec. 3(9)(a).
The second area of concern highlighted in the report identified various instances in which CIGNA or its subsidiaries “…may have denied or terminated benefits solely on the basis of review by a nurse case manager, without sufficient consideration of the opinions of treatment providers, and/or without use of outside medical resources (such as independent medical evaluations) where it may have been appropriate to utilize such resources.” As a result, the examiners concluded that such a practice could constitute an unfair claim settlement practice pursuant to Massachusetts General Law c.176D Sec. 3(9)(c) and c.176D sec. 3(9)(d).
The third area of concern involved instances in which the examiners noted that “…the Companies may have denied or terminated benefits based on incomplete or unduly narrow readings of medical information in a claimant’s file.”In those cases, the examiners felt that the Company’s actions in focusing on particular statements or facts without considering the context in which they were made or other information which might have supported the payment of benefits could constitute an unfair claim settlement practice pursuant to M.G.L. c. 176D sec. 3(9)(c), 3(9)(d), and 3(9)(f).
The fourth area of concern involved the Company’s failure to provide sufficient weight to Social Security Disability Benefits (SSDI). The examiners stated that these cases which involved LTD Claims files could likely be considered a violation of M.G.L. c. 176D sec. 3(9)(c), 3(9)(d) and 3(9)(f).
The fifth area identified CIGNA’s failure to appropriately consider issues of co-morbidity. These instances which also involved LTD claim files, cautioned that the insurer may have denied or terminated benefits before “…fully considering the aggregate impact of multiple ailments, both physical and psychological, on a claimant.” In the examiners opinion, the failure to consider the cumulative effect of a claim’s total condition might also constitute an unfair claim settlement practice under M.G.L. c. 176D sec. 3(9)(c), 3(9)(d) and 3(9)(f).
In the sixth area of concern identified, the examiners noted that in six cases involving the review of litigation involving an LTD claim, the examiners noted that the Companies’ “…conduct regarding these claims may demonstrate an unfair claim settlement practice.” More specifically M.G.L. c. 176D sec. (9)(g) states that “compelling insured to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds” may constitute an unfair claim settlement practice.
Lastly the seventh area of concern involved CIGNA’s failure to use appropriate job descriptions during the claims process Specifically, “The examiners noted several claim files in which the Companies may have relied on job descriptions that did not accurately reflect the nature of the duties performed by the claims.” Such actions could very well be considered an unfair claims settlement practice under M.G.L. c.176D sec. 3(9)(a), 3(9)(c), and 3(9)(d).