OIR Receives $446K in Multistate Settlement Over Conseco Companies’ Business Practices

Apr 8, 2009

The Florida Office of Insurance Regulation (“OIR”) has received $446,000 as Florida’s share of a multistate $2.3 million settlement agreement with Conseco Senior Health Insurance Company and Bankers Life and Casualty Insurance Company over alleged inappropriate long-term care business practices. 

A press release from the OIR about the settlement is reprinted below.


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Florida Office of Insurance Regulation Recovers $466K in Multistate Settlement Over Conseco Cos. Business Practices

TALLAHASSEE, Fla.  – Florida Insurance Commissioner Kevin McCarty today announced that the Office of Insurance Regulation (Office) has received $466,000 as Florida’s share of a multistate settlement agreement with Conseco Senior Health Insurance Co. (Conseco Senior) and Bankers Life and Casualty Insurance Co. (Bankers Life), both subsidiaries of Conseco Inc., over alleged inappropriate business practices.

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.

“Anytime companies engage in business practices that are detrimental to the best interests of Florida consumers, they must be held accountable,” said Commissioner McCarty. “The success of this multistate effort shows clearly the importance of state regulators in ensuring that consumers are protected from bad business practices in insurance sales.”

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 Regulatory 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 $1.4M 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.

Florida, along with Illinois, Indiana, Pennsylvania and Texas were the lead states in coordinating and overseeing the examinations.

The examinations reviewed business practices during the period Jan. 1, 2005 through April 30, 2007. On-site exams of the two companies were conducted simultaneously from July 9, 2007 through Oct. 19, 2007. Separate examination reports were done on each company and issued April 30, 2007. Bankers Life was examined at its offices in Chicago; and Conseco Senior was examined at its offices in Carmel, Ind.

Conseco Senior has not written new business since 2003. Bankers Life is still licensed in Florida and has 42,000 covered persons.

The business practices of each company, specified as “benchmarks” in Exhibit C of the Settlement Agreement, will remain under review through 2011.

The $466,000 was paid to the Florida Insurance Regulatory Trust Fund.


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