April 17--Aetna Life Company will pay a $500,000 penalty to the New York Department of Financial Services after the state regulatory agency discovered the insurer failed to inform policyholders of rights and benefits guaranteed by their policies.
An investigation by the department found that Aetna had used consumer policy forms between 2002 and 2011 for six group-life insurance policies that did not conform to state requirements. As a result, Aetna did not inform the policyholders of all their rights and benefits under the policies.
Benjamin M. Lawsky, New York State's Superintendent of Financial Services, said, "When insurance companies fail to comply with their consumer protection requirements, it can prevent New Yorkers from making informed choices. We will take action whenever insurers leave consumers in the dark about their rights and benefits."
Aetna spokeswoman Susan Millerick said, "Aetna has added technical language requested by the NY DFS to our group life policy forms. We have also improved our policy revision process. The fine was levied because we did not make these changes in a timely manner as requested by the department. We have no evidence suggesting that any of our members were harmed by the delay."
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