Pennsylvania Protects Consumers in Reaching Settlement with Three CIGNA Companies

HARRISBURG, Pa., May 22, 2013 /PRNewswire-USNewswire/ -- The Pennsylvania Insurance Department today announced that it has reached a settlement agreement involving the claim handling practices of 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 settlement was reached through the coordinated efforts of five state insurance departments: California, Connecticut, Maine, Massachusetts and Pennsylvania.

"The state examinations showed that these three CIGNA companies were lax and not using available information to appropriately process disability income insurance claims," Commissioner Michael Consedine 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, as well as an additional $29 million in additional amounts for presently open claims."

This 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. Pennsylvania will receive $150,000 in fees to monitor compliance.

To see a copy of the full settlement agreement, visit www.insurance.pa.gov and click on the "consumer protection" tab.

The companies have also set up a dedicated line for policyholders who may have questions on the claim re-evaluation process. That number is 855-625-5528.

Consumers with insurance questions should call the department's toll free number at 877-881-6388.

Media contact: Rosanne Placey or Melissa Fox, 717-787-3289

SOURCE Pennsylvania Department of Insurance



RELATED LINKS
http://www.insurance.pa.gov

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