LINA Settlement Agreement
Life Insurance Company of North America (LINA) has reached a settlement agreement with the California Department of Insurance to resolve allegations that LINA committed disability insurance claims handling violations. LINA will pay $600,000 to settle the allegations and will also make changes to its change handling policies. Furthermore, the insurance company will review previously denied claims to determine if claimants are owed any benefits.
According to the California Department of Insurance, an onsite examination of LINA's claims handling practices uncovered instances where LINA made decisions about claims denials before the medial records for the claimants were even requested. Furthermore, the Department of Insurance found situations where LINA adjusters "ignored substantial new information after a claim had initially been denied."
As part of the settlement, LINA has been ordered to cease and desist from engaging in any acts or practices that violate California Law.
"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," California Insurance Commissioner Steve Poizner said in announcing the settlement.
People affected by the reassessment program would have had their claims denied by either LINA or CIGNA between January 1, 2005 and December 31, 2007. However, claimants who were denied after 2007 may still be eligible to file a claim against LINA. The reassessment involves claimants who either lived in California at the time of the denial or who currently live there.