CIGNA fined in Multi-State Regulatory Settlement Agreement Re Group Long-Term Disability Claims Handling; Some CIGNA Claims to be Re-Evaluated
Following a Targeted Market Conduct Examination of CIGNA’s disability insurance claims handling practices, CIGNA companies — Life Insurance Company of North America, Connecticut General Life Insurance Company, and Cigna Health and Life Insurance Company (fka Alta Health and Life Insurance Company) — entered into a Regulatory Settlement Agreement in May 2013 with the California Department of Insurance, the Connecticut Department of Insurance, the Maine Bureau of Insurance, the Massachusetts Division of Insurance, and the Pennsylvania Insurance Department. Insurance regulators of other states may adopt the terms by becoming a Participating State. As of this time, Arizona is not amongst the Participating States.
The targeted market conduct examinations were initiated by the Maine Superintendent of Insurance and the Massachusetts Commissioner of Insurance in 2009 to investigate whether CIGNA’s claim handling practices conformed with the standards upheld by the National Association of Insurance Commissioners. The regulatory concerns raised by the initial examinations prompted Connecticut and Pennsylvania’s insurance commissioners to open similar examinations and for the California Department of Insurance to reopen its 2006 examination.
As a result of the examination, the CIGNA companies were ordered to pay fines in the amounts of $500,000.00 to the California Commissioner of Insurance, $175,000.00 to the Maine Superintendent of Insurance, and $250,000.00 to the Massachusetts Commissioner of Insurance, and to take certain corrective actions in the handling of group disability insurance claims, to include:
- Giving significant weight in a claimant’s favor if the SSA has awarded SSDI disability income;
- Improving procedures for gathering medical information, attempting to resolve discrepancies in medical statements or conclusions, documenting and outlining the medical conclusions upon which a determination of disability is made, and evaluating functional capacity with the presence of co-existing or co-morbid conditions;
- Following written guidelines for using external medical resources if medical opinion/information is unclear or contradictory or if the claims adjuster disagrees with the opinions of the treating physician(s);
- Providing clear and express notice to claimants of information to be provided and information to be collected by the company and taking reasonable steps to work with the claimant to identify and obtain such information;
- Ensuring that IME and FCE doctors hired by CIGNA comply with ethical and professional standards and are not influenced by CIGNA in forming their opinions and that they consider all available medical or vocational evidence when evaluating the claimant.
The Regulatory Agreement also calls for all denied or adversely terminated long-term CIGNA, LINA and Connecticut General disability claims to be subject to review and remediation, if the claims were made by residents of the Participating States during the Remediation Period, unless the claims were denied/terminated for certain reasons such as coverage ineligibility. The Remediation Period for all Participating States, except California, runs from January 1, 2009 through December 31, 2010. The Remediation Period for California residents runs from January 1, 2008 through December 31, 2010.
If you had a CIGNA disability claim in one of the Participating States that was denied or terminated during the Remediation Period, we strongly suggest that you contact an experienced disability insurance attorney to have your claim reevaluated under the enhanced claims procedures agreed to under the Regulatory Settlement Agreement. CIGNA has set aside $77 million in reserve for potential claim payments.
A copy of the Regulatory Settlement Agreement is available at this link.