N.Y. Financial Services Dept.: Superintendent Adrienne A. Harris Secures $21.6M for New Yorkers Following Long Term Care Insurance Investigation

ALBANY, New York, Aug. 19 -- The New York State Department of Financial Services issued the following news release on Aug. 18, 2022:

Adrienne A. Harris, Superintendent of Financial Services, announced today that John Hancock Life & Health Insurance Company's (JH) will return $21,594,671 to consumers and/or their beneficiaries and $2,228,031 to the New York State Medicaid Program. JH will also pay a $2.5 million dollar penalty for violations of New York Insurance Law following a compliance review with state requirements for long term care (LTC) insurance.

"When New Yorkers get older, many will need long term care services which are often not covered by regular insurance and can be costly. It is critical that these companies operate in full compliance with the law to provide New Yorkers with the care and benefits they deserve," said Superintendent Harris. "DFS will continue working alongside the New York State Medicaid Program to protect the financial health of consumers and ensure long term care insurance products are administered in full compliance with New York law and regulations."

"The New York State Medicaid Program is responsible for protecting our most vulnerable, while preserving the integrity of State taxpayer dollars. We are pleased with the outcome of this investigation and commend the Division of Financial Services for securing $21.6 million for the New Yorkers who were wrongfully terminated from their long term care insurance," said Amir Bassiri, NYS Medicaid Director.

DFS received a consumer complaint through the Partnership Office at the New York State Department of Health (DOH) after JH was deficient in responding to and resolving a matter with a complainant and the Partnership Office regarding the premature termination of the complainant's long term care policy. Partnership LTC is jointly regulated by DFS and DOH.

DFS and DOH conducted an investigation and determined that JH prematurely terminated 156 NYS Partnership LTC policies prior to insureds exhausting benefits to which they were entitled, and miscalculated lifetime maximum benefits in cases when insureds used less than the maximum daily benefits under their policies. The premature termination of coverage occurred between February 2001 and July 2019 and resulted in 27,161 days of unpaid benefits. Because JH prematurely terminated the policies, insureds who were on claim or who went on claim after the termination may have had to pay LTC expenses out of pocket or access Medicaid prematurely instead of being covered by the LTC policy. John Hancock will make its New York Partnership policyholders whole through full remediation.

As part of its agreement with DFS, JH has agreed to DFS' findings and signed a Consent Order.

Read a copy of the consent order on the DFS website (https://www.dfs.ny.gov/industry_guidance/enforcement_actions_Insurance).

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Original text here: https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202208181