Cigna Settlement, New Details Emerge as Facts are Released

It has been nearly three months since the May 13th Regulatory Settlement Agreement and Targeted Market Conduct Examination on Disability Claim Handling practices was signed. As new details emerge regarding the settlement with Cigna group over claims handling practices for long-term disability insurance, Frank N. Darras, the nation’s top disability lawyer offers clarification of some terms of the agreement.

May 13, 2013

A settlement agreement comes after individual examinations into Cigna’s claims handling practices by the California, Connecticut, Maine, Massachusetts, and Pennsylvania state insurance departments. As a result, the CIGNA companies were instructed to begin reviewing past claims that were improperly handled in California from January 1, 2008 to December 31, 2010.

Several companies were involved in the settlement, including CIGNA Health and Life Insurance Company (formerly known as Alta Health and Life), and Connecticut General Life Insurance Company, Life Insurance Company of North America. They set aside $77 million for estimated payments to wrongfully denied policyholders nationwide. They were also required to pay a $500,000 penalty to the California Department of Insurance and $150,000 to reimburse the department for the cost of ongoing monitoring that is required under the settlement agreement.

To Date

“Today, the settlement reviews now encompass 47 states and are invisible to disabled policyholders. The only notice insureds will receive from Cigna is first, if the Company needs additional medical, vocational or financial information from the claimants. In which case the insured will receive correspondence from Cigna, detailing what they need to submit,” says Darras.

Second, if Cigna determines additional benefits are due the insureds, each person will be notified by letter of the findings and the amount of benefits to be paid. Along with this letter will be a waiver of rights to further litigate against Cigna.

“In light of new details emerging about this settlement, pay close attention to any correspondence you receive from Cigna. Take time to consult a top disability lawyer to help navigate this settlement and to ensure you get what you deserve,” says Darras.

About the California Department of Insurance

Life Insurance Company of North America (“LINA”), and the California Department of Insurance entered into a Stipulation and Waiver, File Number UPA 2012 00018 signed on May 10, 2013 by Matthew G. Manders, President of LINA.