A four year Targeted Market Conduct Examination of CIGNA and Life Insurance Company of America (LINA),’s Disability Income Insurance Claim Handling Practices was just concluded by the Departments of Insurance of Maine, Massachusetts, California, Connecticut and Pennsylvania. Review the Regulatory Settlement Agreement of May 13, 2013. See CIGNA’s discussion of this in its SEC filing. As a result of this close examination, significant changes must be made in their handling of disability claims, as set forth in the Regulatory Settlement Agreement. Cigna will pay significant fines and set aside 77 million dollars to pay disabled claimant’s whose claims were denied.
This agreement is far-reaching in its application to ongoing disability claims managed by CIGNA because it creates a baseline of claims handling protocols which must be followed. We will use this benchmark in our review of our client’s claims, not only administered by CIGNA and LINA, but all other companies, including Hartford, Reliance Standard, Prudential and Unum, to name a few.
The last time this occurred was in 2005, when all 50 states joined in a massive Market Conduct Study of Unum’s claims handling practices. What emerged was the Multistate Regulatory Settlement Agreement, and the review of hundreds of thousands of claims denied during a certain time period.