NU Online News Service, Nov. 4, 2004, 5:01 p.m. EST

A major insurer and its corporate parent have settled charges of improper claim handling in North Carolina, state regulators say.[@@]

The North Carolina Department of Insurance says it has reached a voluntary settlement with United Healthcare of North Carolina Inc., Greensboro, N.C., and United HealthCare Insurance Company, Minneapolis. The settlement agreement calls for each company to pay a civil penalty of $1.1 million.

United HealthCare is a unit of UnitedHealth Group Inc., Minnetonka, Minn.

North Carolina insurance regulators say the UnitedHealth units failed to make prompt corrections to claims system problems after the units became aware of the problems. Regulators also have charged that the units failed to investigate and resolve disputes promptly when they received complaints from insureds about claims errors.

As part of the agreement, neither UnitedHealth unit admits to violating any state laws or regulations. Both companies agreed, however, to study their operations and prepare a plan to address any claims problems, according to North Carolina insurance regulators.