Conseco to pay $2.3M for bad practices

Regulators discovered lapses in the company’s long-term-care insurance claims and complaints processing.
MAY 08, 2008
By  Bloomberg
Conseco Inc. was slapped with a $2.3 million fine after insurance regulators discovered lapses in the company’s long-term-care insurance claims and complaints processing. The Carmel, Ind.-based carrier will also have to pay $30 million in claims-handling improvements and restitution. A team of 40 insurance regulators, including Florida and Pennsylvania, investigated Bankers Life and Casualty Insurance Co. of Chicago and Conseco Senior Health Insurance Co. of Bensalem, Pa., both subsidiaries of Conseco. Although the company had self-reported some problems in handling claims, the examination revealed that Conseco didn’t have the procedures in place to process the claims and complaints in a timely manner. Regulators also found that there was no evidence that Conseco provided clients with information on its complaint-handling procedures. Additionally, Conseco didn’t always complete a claims investigation within 30 days. Instead, it would bundle claims together and pay them at once, resulting in delays. Inappropriate use of “hold” claim status also delayed payments to clients. As part of Conseco’s settlement with regulators, Conseco Senior Health will review 1,112 claims it had originally denied and provide notices to 18,000 policyholders whose claims may have been partially or subsequently denied. The company also must set up a call center for customers who think that their claims were improperly settled. Conseco Senior Health Insurance is no longer writing new business. Bankers Life, as part of its settlement, will also have to improve its agent training program and eliminate producer complaint thresholds, so that one complaint can lead to disciplinary action. Agents for the company will be supervised and terminated if they don’t comply with marketing standards. If Conseco doesn’t make the proper corrections, it will be fined an additional $10 million.

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave