Conn. AG Hits Department’s Failure to Penalize Health Insurer

March 30, 2007

Connecticut Attorney General Richard Blumenthal said the state Department of Insurance (DOI) has failed to hold an insurance company accountable for “repeatedly and unconscionably denying consumers promised health benefits.”

After seven months of what he terrms “prodding and cajoling” the DOI into action, Blumenthal said patients who complained to his office will likely get the benefits they are owed from Assurant Health Insurance (a.k.a. Fortis and John Alden Company) under a consent order announced today. However, Blumenthal said the agreement fails to penalize the company for its abusive practices.

“This order is tantamount to telling a thief to return stolen money – but imposing no punishment,” Blumenthal said. “Patients will finally get the benefits that we vigorously fought tenaciously to achieve for them, but this order fails to impose the significant penalties warranted for Assurant’s abusive, anti-consumer practices. This step is a tap on the wrist – not even a slap – and even worse, may tie our hands in pursuing more aggressive legal action under insurance statutes.”

Blumenthal cited a South Carolina jury verdict against Assurant where penalties of $15 million were ordered. The court in that case, Mitchell v. Fortis Insurance Company, found Assurant’s conduct to be “highly reprehensible.”

Blumenthal said Assurant has “arbitrarily and abusively denied benefits to consumers suffering catastrophic illnesses – improperly applying retroactive or ‘look-back’ procedures on the basis that patients’ conditions pre-existed policy onset dates.”

Blumenthal said he requested an audit more than seven months ago from the DOI on Assurant’s practices. Instead of producing the audit it promised – and after much delay – the DOI entered into an agreement with the company, ordering Assurant to pay the claims that it improperly denied.

“Cheating consumers out of promised coverage for catastrophic illnesses deserves strong penalties and consequences,” Blumenthal said. “We asked for an audit of Assurant’s unconscionable denial of health benefits – but the Department of Insurance instead provided a meaningless agreement with the company. This agreement simply orders Assurant to do what it should have done already: pay for the health care benefits it promised to patients suffering from serious illnesses.”

Source: Conn. Attorney General

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