Processing Your Payment

Please do not leave this page until complete. This can take a few moments.

May 22, 2013

Cigna out $77M in disability-claims dispute

Bloomfield health insurer Cigna Corp. has agreed to a $77 million settlement with Connecticut and four other state insurance regulators for improperly handling long-term disability claims, officials said Wednesday.

The state Insurance Department said Wednesday it worked with regulators in California, Maine, Massachusetts and Pennsylvania to examine the claims procedures of several Cigna subsidiaries in Pennsylvania, including Life Insurance Company of North America (LINA), Connecticut General Life Insurance Co. and Cigna Health and Life Insurance Co., which handle long-term disability claims.

It wasn't immediately clear what the Cigna subsidiaries did wrong, but the company agreed to re-evaluate certain claims and set aside $48 million in reserves for additional benefits that it may need to pay out to policyholders.

The insurer said it set aside an additional $29 million for unresolved claims.

In a statement, Cigna said it voluntarily agreed to review a set of past long-term disability claims from 2009 and 2010 (also from 2008 in California ) to see if they meet updated claims standards it has established.

"The enhanced standards are related to our procedures for gathering information and documenting decisions in our claim files and engagement between our clinical staff and health care professionals who provide care to our customers," Cigna said in a statement. "By collaborating with state regulatory agencies, both historically and during the most recent review, Cigna continues to work to establish processes that meet or exceed best practices for handling long-term disability claims while also continuing to build a better service experience for our customers."

This regulatory settlement also requires Cigna to:

• Enhance claim procedures to improve the claims handling process to benefit current and future policyholders.

• Participate in a 24-month monitoring program conducted by the insurance departments of the five states involving random sampling and on-going consultation.

• Pay fines and administrative fees totaling $1.7 million.

Sign up for Enews


Order a PDF