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July 21, 2008 at 02:27 PM
HealthMarkets Inc. has agreed to pay at least $20 million in penalties to resolve state regulators’ concerns about subsidiaries’ health insurance sales and policy administration efforts.
The settlement agreement involves the HealthMarkets MEGA Life and Health Insurance Company, Mid-West National Life Insurance Company of Tennessee and Chesapeake Life Insurance Company subsidiaries, according to HealthMarkets, North Richland Hills, Texas.
Officials in Washington state and Alaska served as the lead regulators overseeing a 3-year multi-state exam of the HealthMarkets subsidiaries.
The exam covered a 5-year period ending Dec. 31, 2005.
The exam “stemmed from the volume, scope and nature of complaints made against the companies by consumers in many states,” according to Washington state officials.
The examiners “found multiple problems involving consumer disclosure, oversight and training of agents, claims handling, and complaint handling practices,” officials say.
In a addition to agreeing to pay a $20 million fine, HealthMarkets has agreed to pay $10 million in additional penalties if it fails to meet other terms of the settlement agreement.
