CIGNA Enters Settlement with Five States Which Allows Wrongfully Denied Policyholders in those States a Chance to Have Claims Reassessed.
CIGNA also agrees to set Aside $77 Million as part of the settlement.
The states of California, Connecticut, Massachusetts, Maine and Pennsylvania have agreed to a settlement with CIGNA, wherein CIGNA will pay approximately $1.6 million in fines and fees. The Company and its subsidiaries also set aside $77 million for projected payments to policyholders whose claims weren’t handled properly. The settlement covers policyholders in those states that had claims denied between January 1, 2008 and December 31, 2010. As part of the settlement, CIGNA has agreed to update its claims-handling processes as state standards for claims procedures have evolved overtime. Under this settlement, CIGNA is also required to enhance claims procedures in the future and participate in a two-year monitoring program conducted by the insurance departments of the five lead states. The settlement covers CIGNA’s subsidies, Connecticut General Life Insurance Company and Life Insurance Company of North America.
The foregoing settlement is very reminiscent of a similar settlement Unum entered into approximately ten years ago with state insurance commissioners. When commenting on the settlement, Peter Burke explained that disability claimants who have a policy that is subject to ERISA already have the deck stacked against them, and when a company like CIGNA or Unum engages in improper claims handling practices, that makes the process even that more difficult for the person seeking benefits. For more information relating to this settlement, or for help with any long term disability claim, please call Burke Harvey & Frankowski, LLC toll free at 888-930-9091 or visit www.bhlongtermdisability.com.