Any Connecticut resident who has had a health claim denied by John Alden Life Insurance Co. or Time Insurance Co., which was formerly known as Fortis Insurance Co., may draw solace from a recent settlement with the state.
The two Assurant Health insurers have agreed to pay about $920,000 in restitution to insured customers and $2.1 million in penalties to the state in a settlement with the Connecticut Insurance Department over charges they illegally denied claims or improperly rescinded, cancelled or limited short-term health insurance policies.
The two insurers must also implement a corrective action plan.
Two Year Examination
The agreement ends the Insurance Department’s two-year investigation of short-term health insurance sold in Connecticut from 2001 through 2007.
The insurers, who cooperated with the investigation, neither admitted nor conceded any violation, fault, wrongdoing or liability.
Insurance Commissioner Thomas Sullivan alleged that the companies took advantage of powerless, ill people at the exact time they needed help and support the most, especially in denying claims because of falsely alleged prior conditions.
“All Connecticut consumers must be treated fairly, reasonably, and in compliance with our laws,” Sullivan said
The department investigated about 3,000 claims from 820 policyholders in Connecticut. Out of those claims, 23 percent of policyholders had at least one claim denial overturned through the insurance department’s examination. That amounted to 191 policyholders who had full or partial overturns.
Cancer was one type of claim.
Pre-Existing Conditions
As for other kinds of illnesses that drew denials, Insurance Department spokeswoman Dawn McDaniel said, “It ran the gamut. During our examination process, we didn’t identify trends in illnesses. They didn’t only deny particular illnesses. What they had was a process where certain symptoms would trigger deeper investigation as to whether they could be pre-existing.”
Assurant Health is based in Milwaukee, Wisc.
