Insurance companies pay settlements over claims investigations

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BY NANCY HICKS / Lincoln Journal Star

Two insurance companies have settled with the Nebraska Department of Insurance after the agency investigated consumer complaints.

Conseco Health Insurance Co. agreed in October to pay a $25,000 fine and cooperate with the department on future complaints.  

Washington National Insurance Co. paid a $5,000 fine under a consent agreement with the state.   

Both companies are part of the Conseco umbrella, said insurance department attorney Joel Green.

Conseco Health’s fine is the biggest paid by Conseco in Nebraska and is among the larger fines ever paid by an insurance company to the state.

Two other Conseco-related companies that do business in Nebraska were part of a multi-state settlement announced in the spring. 

Insurance department investigators had determined Conseco Health allegedly failed to explain the denial of claims, overlooked claims and had delays in processing claims far greater than allowed by law, based on investigation of complaints.

The department investigated  Washington National for failing to promptly pay medical and long-term care claims in 2007.

Miscommunication and  confusion between the company’s long-term care claims department and Medicare supplement claims department resulted in claims not being investigated properly or in a timely manner, to the consent order said.

The state agency and the company are working together to  eliminate future problems, said Green.

“This is a reputable company and has a lot of policyholders in our state,” he said.

A Conseco official said the company meets Nebraska performance standards and regulations. 

Since the problems in 2007 outlined in the consent order, the company has “implemented many measures to prevent claims issues, including 100 percent auditing of all denied or rejected Nebraska claims to ensure accuracy,” said Jim Rosensteele, a Conseco spokesman. 

Two Conseco companies —Conseco Senior Health Insurance and Bankers Life and Casualty — also paid Nebraska $23,857 as part of a $2.3 million multi-state national settlement this spring. 

The settlement agreement was reached after regulators found a  pattern of consumer harm in the company’s long-term care insurance business. 

“It is vital that long-term care insurers make prompt and appropriate payment of claims to consumers who are older and whose life and well-being are dependent upon it. Conseco failed this test,” according to a Pennsylvania insurance department executive.

Claim payment delays are the  ongoing theme among all the settlements, both state and national, Green said. 

But the settlements don’t necessarily represent a problem with all Conseco-related companies, he said. 

It’s likely a coincidence that the state and local settlements were completed about the same time, he said. 

Conseco-related companies have about 0.65 percent of the life insurance market in Nebraska with  $5.9 million in premiums, 0.30 percent of the annuity market with $6.8 million in premiums and 1.75 percent of the health insurance market with $40.2 million in premiums, according to Bruce Ramge, with the Department of Insurance.

Reach Nancy Hicks at 473-7250 or nhicks@journalstar.com.