A regulator group that includes 41 states and the District of Columbia has agreed to a $5 million short-term medical insurance settlement with HCC Life Insurance Company and an HCC Life medical insurance affiliate.
HCC Life, a Houston-based company that’s now part of the Tokio Marine Group, stopped selling short-term medical insurance in June. The company has denied any wrongdoing or any activities that violate state insurance laws or regulations.
The 42-jurisdiction regulator group accused the company of having deficiencies in the handling short-term medical claims, according to officials at the California Department of Insurance.
The settlement agreement comes as the administration of President Donald Trump is working on proposed short-term medical insurance regulations. Under former President Barack Obama, the U.S. Department of Health and Human Services (HHS) capped the coverage term for short-term medical insurance policies at 90 days. The Trump administration has proposed leaving the maximum length of short-term medical policies up to state insurance regulators.
The HCC Life settlement agreement calls for HCC Life to pay the $5 million to the 42-jurisdiction group that ran the HCC Life short-term medical business examination.
The agreement also calls for HCC Life to:
- Pay the claims left over from its short-term medical run-off business in a timely business.
- Let an examiner audit HCC Life’s handling of the run-off claims.
- Audit the performance of its own producers, third-party administrators, managing general agents and contractors.
HCC Life has also agreed to stay out of the short-term medical insurance market within any of the settling states for at least five years.
The lead states for the multistate regulator group are Florida, Indiana, Kansas and Utah.
HCC Life’s Response
Doug Busker, an HCC executive, said in an email that the settlement agreement does not identify any deficiencies in sales, marketing or claims practices at HCC Life, or at the HCC Life medical insurance affiliate, HCC Medical Insurance Services LLC.
The agreement does not contain any admission of wrongdoing by HCC Life or HCC Medical Insurance Services, Busker said.
The insurers “agreed to the settlement in order to resolve disputed matters associated with this former line of business and agreed to pay $5 million to the settling states for the examination, administrative costs and compliance,” Busker said.
The insurers “fully cooperated with the review and have obtained a full release from participating states related to the review,” Busker said.