Cigna companies--Life Insurance Company of North America, Connecticut General Life Insurance Company, and Cigna Health and Life Insurance Company--recently entered into a Regulatory Settlement Agreement requiring Cigna to change its claims handling practices, reassess prior denied claims, pay certain fines, and be subject to future monitoring.  Cigna agreed to the RSA following targeted market conduct examinations initiated by the insurance departments of the states of Maine and Massachusetts.  The market conduct examinations involved investigating Cigna’s claims handling practices to determine whether they conformed to national standards regarding the fair handling of claims.  The examinations raised concerns about Cigna’s practices and led to discussions with Cigna and a plan of corrective action by Cigna to address the concerns.

The RSA is between the Cigna companies and the insurance departments of the states of California, Connecticut, Maine, Massachusetts and Pennsylvania and other state insurance departments who agree to participate in the agreement.  The state of Minnesota has not yet agreed to participate.

A national-wide regulatory settlement agreement between Unum Group, one of the largest disability carriers, and state regulators signed in 2005 served as a benchmark for the Cigna review and agreement.  The Cigna RSA contains similar corrective action requirements to the Unum Group RSA.   As part of the Cigna agreement, Cigna will reassess prior claims denied from January 1, 2009 through December 31, 2010, with the exception that for residents of California, the reassessment period is from January 1, 2008 through December 31, 2010.  The reassessment will involve reviewing the claims to determine if the enhanced claims procedures agreed to in the RSA would impact the prior denial decision.  If the Company finds that it would impact the prior decision, it must pay additional benefits. 

The enhanced claim procedures, which Cigna and the participating states agree represent “best practices” for reviewing group LTD claims, include:

  • Significant weight must be given significant weight in a claimant’s favor unless certain exceptions apply;
  • Implementing procedures aimed at a more fair review and gathering of medical records;
  • Guidelines for use of external medical resources if a claimant’s condition, functional status and level of impairment is unclear or the claims representative disagrees with treating physician opinions;
  • Providing clear notice to claimants of information that is needed;
  • Assuring that Cigna’s reviewing professionals are selected and conduct reviews in a neutral manner.

The RSA subjects Cigna to quarterly monitoring of not only claims being reassessed but also of claims adversely affected on or after January 1, 2013.  Cigna will also be subjected to a re-examination 24 months after the date of the RSA.

The Cigna RSA represents an opportunity for those claimants whose claims were denied in 2009 and 2010 to have benefits restored.  The RSA should also prove helpful to new claims that have the benefit of the enhanced claims procedures Cigna has agreed to under the RSA.