DOI Says That Poorly Handled Claims May Be Re-Opened For Further Consideration
On June 12th, the Massachusetts Division of Insurance announced that the CIGNA Companies has agreed to pay Massachusetts $250,000 in penalties in addition to another $150,000 in fees to monitor compliance of the insurer’s future conduct. CIGNA, headquartered in Bloomfield, Connecticut, is one of the largest health service companies and health care insurance providers in the country. The announcement comes as part of a multi-state settlement in which the insurer has agreed to pay $1.675 million in fines and fees to the insurance divisions of Massachusetts, California, Connecticut, Maine and Pennsylvania in response to allegations that the company and its subsidiaries improperly handled disability income insurance claims.
“The parallel state examinations revealed that the CIGNA Companies were giving insufficient attention to the appropriate processing of disability income insurance claims,” explained Commissioner of Insurance Joseph G. Murphy. “Such findings are particularly troublesome given the circumstances facing most consumers forced to seek disability payments. Working with our fellow regulators, we have crafted a settlement which requires the companies to set aside more than $75 million to address both open and closed claims which may have been handled inappropriately.”
The allegations that the insurer was lax in ensuring that it had used all available information in order to process disability insurance claims properly implicated the following companies under the CIGNA umbrella: Life Insurance Company of North America, Connecticut General Life Insurance Company and CIGNA Health and Life Insurance Company (formerly known as Atla Health and Life Insurance Company).
In addition to setting aside $75 million dollars to handles both open and closed claims, CIGNA will be required to enhance its procedures to improve the claims handling process in order to provide better service to its current and future disability insurance policyholders. It must also create a remediation program so that its enhanced claim procedures for disability insurance can be applied to specific previously denied or adversely terminated claims for policyholders within the five states involved in the settlement agreement. Finally the insurer must also submit to a 24-month monitoring program to be supervised by the Insurance Divisions of Massachusetts, California, Connecticut, Maine and Pennsylvania and which will include random sampling of the claims handling process as well as ongoing consultations.
“We are pleased with the outcome of the Division’s settlement with CIGNA,” said Undersecretary of Consumer Affairs and Business Regulation Barbara Anthony “This is a fair resolution for consumers who rely on these payments to live. Our offices will continue to monitor the marketplace for unfair trends and serve as an advocate for consumers when we find them.”
What An Affected Massachusetts Policyholder Should Do
CIGNA has established a dedicated line for policyholders whose previous or current claim may be reviewed under the terms of the settlement agreement or for those who simply may have questions about the claim re-evaluation process in general. That number is (855)625-5518.
The Massachusetts Division of Insurance noted that for Massachusetts consumers who may have questions with regards to this settlement announcement may contact the Division through its DOI Consumer Services Unit Toll Free Number at (877)563-4467.