Last week, North Carolina Insurance Commissioner Jim Long issued a news release urging consumers holding long term care insurance policies issued by two subsidiaries of Conseco Inc. (“Conseco”) to be aware of a multi-state settlement (the “Settlement”) that could result in adjustments made to past claims.  Conseco agreed to a $2.3 million fine, along with an additional $30 million for claims-handling improvements and restitution.

The two Conseco companies involved, Conseco Senior Health Insurance Company and Bankers Life and Casualty Insurance Company, failed to properly handle long term care insurance claims from January 1, 2005 through April 30, 2007.  Specifically, they did not handle claims in a timely manner, properly document and maintain claims files, or adhere to applicable regulations governing the timing of company responses to claimants.  Additionally, Bankers Life and Casualty Insurance Company, which, unlike Conseco Senior Health Insurance Company, writes new business, also had deficiencies with respect to marketing and sales compliance.

Conseco Senior Health Insurance Company has agreed to review 1,112 claims previously denied and send notices to an additional 18,000 policyholders for claims previously denied in whole or in part after an initial payment.   Under the terms of the Settlement, consumers whose claims were denied by either of these companies may be eligible for reversal of the initial determination.  A toll-free call center has been established to address policyholder inquiries regarding the Settlement.

For a copy of the settlement agreement, click here.

For a copy of the market conduct report, click here.