CIGNA LINA disability screw-up nets $600k Settlement in California

October 7th, 2009. By AbiK

I may not agree with Steve Poizner on his views of California labor law, but when he gets it right on other things, I give him his due. The recent bad faith insurance settlement that the California Insurance Commissioner announced with Life Insurance Company of North America (aka LINA, and part of CIGNA) is one such time when he got it right. Here’s the general play by play…(click to end of post to find out if you qualify)

1. LINA Denies Disability Insurance Claims

During the period January 1, 2005 to December 31, 2007, LINA improperly handled disability insurance claims in violation of California state laws. Translation: folks filing for disability insurance during that time were denied benefits that they may have actually been eligible for…they got screwed.

2. California Department of Insurance Investigates LINA

This is where Poizner’s team comes into play. The CDI conducted an on-site examination of how LINA processed claims. That’s when the “gotcha!” moment occurred. Seems in some instances LINA made determinations on the eligibility of some claims BEFORE requesting the appropriate medical records of the claimants (insert raised eyebrow here). THEN it seems there were also instances where LINA adjusters ignored “substantial” new information—after a claim had already been initially denied—that could’ve reversed the decision to deny certain claims. Translation: CDI had proof that LINA turned a blind eye to some legitimate disability claims and, as a result, those claimants…got screwed.

3. No where to run, LINA agrees to $600k Settlement

Nothing like being publicly snagged to induce a bit of mea culpa–and that’s what happened, surprise, surprise. After being called on the carpet LINA has agreed to the $600,000 penalty. The settlement also calls for LINA to “cease and desist” from practices that violate California law (thought that was something folks had to do anyway–?). And, to ensure the above, the CDI is providing oversight of LINA’s practices. Translation: LINA’s wrist has been slapped and big brother is watching…LINA’s turn to get screwed.

What the LINA Settlement means for YOU

Think you might have a claim with LINA? Here’s how to know. To be part of the LINA settlement in California (note–this is only for California folks) you must…

• Have received a denial letter from the insurance company with either the logo of LINA or CIGNA (CIGNA’s the parent company of LINA) on the letterhead. See above picture for what CIGNA logo looks like.
• Have been initially denied a claim–or an appeal of a claim–during the time period January 1, 2005 through December 31, 2007.  That means the copy of the denial letter you received needs to be dated within that time period. If you were denied a claim after that time period, you may still be able to file a claim.
• Reside in California either at the time you received the denial letter or currently.
  

Tags: California Insurance, LINA, Poizner

This was posted on Wednesday, October 7th, 2009 at 9:01 am and is filed under Insurance, Settlement . Feel free to respond, or trackback. Read our comments policy.