Florida Insurance Commissioner Kevin McCarty has announced that the Office of Insurance Regulation (OIR) has received $466,000 as Florida's share of a multi-state settlement agreement with Conseco Senior Health Insurance Co. and Bankers Life and Casualty Insurance Co., both subsidiaries of Conseco Inc., over alleged inappropriate business practices. The $466,000 was paid to the Florida Insurance Regulatory Trust Fund.
The 39-state examination focused largely on issues involving the companies' long-term care insurance line of business. Specifically, the companies were targeted for review of their complaint-handling and claims-handling practices. Bankers Life also was reviewed for its marketing practices in all lines of business. Florida, along with Illinois, Indiana, Pennsylvania, and Texas were the lead states in coordinating and overseeing the examinations.
Examination findings included, but were not limited to, unacceptable recording and investigation of complaints. Claims were not properly documented, and were not investigated, settled and paid in a timely manner, as required by statutes, rules and regulations in the various states.
Additionally, the marketing practices of Bankers Life were reviewed and found in general not to be in full compliance with all applicable statutes, rules and regulations.
A settlement agreement was entered into on March 30, 2008, outlining the specific business practices the companies needed to correct. The proceeds now being realized in Florida and the other 38 participating states reflect the settlement proceeds remaining after payments to Florida consumers of nearly $1.4 million under the claims review process. All affected consumers were paid their claims plus interest. The claims review process looked at claims that had been denied from 2005 through 2007.
A total of $2.3 million will be shared among the states, with each state's share based on its premium volume. Florida was at the top of the list with $54.3 million in premium between the two companies, representing a 20.4 percent share of the total available amount.
The business practices of each company, specified as "benchmarks" in the settlement agreement, will remain under review through 2011. Conseco Senior has not written new business since 2003. Bankers Life is still licensed in Florida and has 42,000 covered persons.
