Cigna Inc. has reached a Regulatory Settlement Agreement (RSA) with state insurance regulators over its improper handling of long-term disability (LTD) insurance claims. Cigna agreed to make significant changes to its claims procedures, set aside $7 million for policyholders, and pay the California Department of Insurance a $500,000 penalty and $150,000 to reimburse the cost of ongoing monitoring.
The California Department of Insurance and Connecticut, Maine, Massachusetts and Pennsylvania insurance regulators began examining Cigna Health and Life Insurance Company, Life Insurance Company of North America (LINA) and Connecticut General Life Insurance Company in September 2009. The following failures were found in Cigna’s claims handling processes:
- Not giving independent physicians’ medical findings of due consideration
- Discounting Social Security Disability decisions information
- Not considering workers compensation records appropriately
- Delaying claims unreasonably
- Fraudulently denying claims for non-receipt of medical reports, late documentation, ailments not covered, and more
The RSA requires Cigna to:
- Establish a remediation program for claims denied or adversely terminated between January 1, 2008 and December 31, 2010
- Participate in a 24-month monitoring program
- Undergo a re-examination when the monitoring period is complete
- Pay $1,675,000 in fines and administrative fees to the five states
Cigna must meet the following benchmarks for improving claims handling:
- Establish procedures for weighing Social Security Disability Income benefits awards
- Enhance processes for gathering medical information and documenting conclusions
- Follow guidelines when utilizing independent medical examinations or Functional Capacity Evaluations and share the information with all stakeholders
- Improve evaluation personnel selection
- Provide medical, clinical and vocational evidence
- Professional certification
Cigna claims that the “settlement grew out of a normal cycle of review by state regulators.” The company, which covers some 11.5 million Americans with medical plans, received Consumer Affairs’ poorest one-star rating for customer satisfaction. In 2012, Cigna’s annual revenue was more than $29 billion.
If you think your Cigna claim was mishandled, act quickly as the review time frame is limited. A qualified New York disability insurance attorney can help you seek redress. Sepe & O’Mahony handles disability insurance claims and litigation for clients in New York, California, Arizona, Nevada, Vermont, Pennsylvania, Florida, Washington, Indiana, New Mexico, Alabama, Oklahoma, Montana, Hawaii and Missouri, and throughout the United States.