Golden State regulators say they have negotiated model claims provisions for disability insurers.
The California Department of Insurance has come up with a settlement with Hartford Life Insurance Company, a unit of Hartford Financial Services Group Inc., Hartford, to resolve a dispute over disability insurance policy discretionary clauses, officials say.
Under the terms of the settlement, the policies that Hartford Life sells in California no longer will contain discretionary clause language, officials say.
The settlement also establishes requirements for Hartford Life’s disability benefits decisionmaking process, officials say.
Under the terms of the settlement, Hartford Life must:
- Obtain only information that is necessary to evaluate and decide whether to accept or deny a claim for benefits.
- Consider and interpret the policy and all information that relates to the claim for benefits and make a determination of the claimant’s eligibility for benefits based on the new policy language.
- Provide written explanations of claim denials.
The California “department intends to apply the terms of the settlement to all disability income insurance policies sold in the state,” officials say.
California Insurance Commissioner Steve Poizner has issued a statement praising Hartford Life for agreeing to the settlement.
“I want to commend the Hartford for working cooperatively with the department to resolve this important consumer issue,” Poizner says in the statement.