Sacramento, CACIGNA will pay approximately $70 million to settle lawsuits filed by California, Connecticut, Maine, Massachusetts and Pennsylvania over the company’s denied disability insurance claims. The lawsuit, which involved long-term disability denials, was filed against CIGNA Health and Life Insurance Company, Connecticut General Life Insurance Company and Life Insurance Company of North America. Regulators began an investigation into the company after complaints about policyholders having long-term disability denied.
The Central Valley Business Times (5/24/13) reports that officials investigating the companies found that workers did not properly consider reports and diagnoses of other organizations and medical professionals. This allegedly included disregarding the findings of independent physicians, Social Security Disability decisions and records provided by workers compensation.
Policyholders who had their claims previously denied may be eligible to be reevaluated. CIGNA will pay $500,000 in fines to the California Department of Insurance.
In this case, policyholders did not have to file a lawsuit because regulators stepped in, recognizing that there were some issues with how claims were being processed. Individuals who face such issues may be eligible to file a lawsuit, depending on how their insurance was purchased.
If they purchased the insurance themselves (that is, the insurance is not provided through employment), then if they feel their claim was unfairly denied, they can file a lawsuit against the insurance company. If, however, their insurance is provided through their employment, then their insurance is covered by ERISA and they must file an appeal with the insurance company first. Failure to file an appeal can result in the lawsuit being dismissed from court. Only after all appeal options have been exhausted can the policyholder file a lawsuit. But, the lawsuit can only be used to recover money lost as a result of the claim being denied. An ERISA-covered insurance policy cannot be subject to punitive damages.
Meanwhile, some insurance companies are also accused of not properly paying out death benefits to the beneficiaries of life insurance policies. According to Sierra Sun Times (5/7/13), audits have been conducted by State Controller John Chiang into a variety of insurance companies to determine if they improperly failed to pay death benefits, instead depleting cash reserves and then canceling the policy.
If you or a loved one have suffered losses in this case, please click the link below and your complaint will be sent to an insurance lawyer who may evaluate your California Denied Disability Insurance claim at no cost or obligation.
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