Life insurer accused of mishandling disability claims settles with state
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Life Insurance Co. of North America has agreed to pay the state $600,000 to settle allegations that it violated state law in the handling of disability claims, California Insurance Commissioner Steve Poizner announced.
The Philadelphia-based company also agreed to revamp its claims procedures and to reopen claims closed between February 2005 and June 20, 2006, to determine whether any additional benefits might be due policyholders.
Examinations by the state Department of Insurance found instances where the insurer, known as LINA, made claims determinations prior to requesting medical records from policyholders. Insurance adjusters also ignored important new information after claims had been denied, state investigators said.
LINA has agreed to follow a cease-and-desist order to refrain from engaging in any illegal claims practices, the department said.
‘When insurance companies fail to follow the law in fairly and expeditiously adjusting these claims, it has a devastating impact on policyholders and their families,’ said California Insurance Commissioner Steve Poizner.
-- Marc Lifsher
