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A hooded hacker uses a computer.

Regulation and Compliance > Cybersecurity

Aflac Sues Vendor Over Ransomware-Related Refund

By Allison Bell

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Aflac is suing to get its money back from a support services vendor that was hit by a ransomware hack attack in June 2022.

The Columbus, Georgia-based life and health insurer wants the vendor, Exela, to refund $875,500 in support services fees.

“Exela has acted in bad faith and has been stubbornly litigious in refusing to repay the fee refund,” Aflac says in a complaint filed recently in the U.S. District Court for the Middle District of Georgia.

Representatives for Aflac and Exela did not respond to requests for comments about the case.

Aflac: Aflac is best known in the United States for selling individual life insurance, health insurance and accident insurance products at the worksite.

It reported $4.7 billion in net income for 2023 on $19 billion in revenue.

Exela: Exela is an Irving, Texas-based business process automation company.

It has about 15,000 employees and 4,000 customers around the world.

The Aflac-Exela arrangement: Aflac hired Exela to help it process incoming mail, including payments and documents, in 2008.

It decided to bring the services back in-house in 2020, and it and Exela began to operate under a new agreement in 2021.

A ransomware group hacked Exela in June 2022, and Aflac was unable to use key software involved with claim processing.

Aflac spent $355,927 to cope with the disruption.

The termination: Aflac sent Exela a termination notice in 2023.

Exela agreed to refund Aflac a total of $975,500, including $500,000 by Sept. 15, 2023, and $475,000 by Oct. 15, 2023. Instead, it paid Aflac $100,000 Sept. 22, 2023, and nothing else, Aflac said.

The hackers: The Exela hack was probably the work of the Hive network, according to press accounts based on an entry that the Hive network posted on its dark web blog.

Federal investigators say the Hive network has attacked about 1,500 victims, including hospitals and school districts as well as financial services companies.

The U.S. State Department is offering a reward of up to $10 million for information that helps identify or locate any Hive group leaders and a $5 million reward for information leading to the arrest or conviction of any Hive group hackers.

Credit: Sergey Nivens/Adobe Stock

Allison Bell

Think_Allison

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