Insurance News

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February 14, 2014

Missouri regulators lead multistate, market conduct investigation of Humana

Humana Insurance agrees to $4.5 million settlement and change in business practices

Jefferson City, Mo. - The Missouri Department of Insurance today announced that a regulatory settlement agreement has been reached with Humana Insurance Co. Missouri regulators led a multistate market conduct investigation of Humana in collaboration with regulators in Mississippi and Wisconsin. In the settlement, Humana agrees to pay $1.8 million in fines that will be divided among 10 states and to establish a $2.7 million consumer restitution pool.

The multistate market conduct investigation of the company began in 2012. The investigation was based upon a referral of a single complaint that was filed by a small employer with the Missouri department's consumer affairs division. The investigation found that Humana Insurance Company was requiring some employers, who purchased small group medical insurance, to also purchase a group life insurance product. In the settlement, Humana agreed to make business reforms to include notifying employers and insurance agents that the additional purchase of life insurance is not required. Humana also agreed to set up a $2.7 million restitution pool to provide refunds for employers who were required to purchase the group life product.

"Policyholders should be able to choose individual insurance products without insurers bundling products together" said Missouri Insurance Director John M. Huff. "I am pleased our team was able to collaborate on a settlement with multiple states to benefit consumers."

Missouri will receive $390,886, paid to the Missouri State School fund.  Other states that will benefit from the settlement and fine are Alabama, Arkansas, Georgia, Mississippi, Montana, North Carolina, Tennessee, Utah and Virginia.

In market conduct exams and investigations, the Department of Insurance reviews insurance company practices regarding the treatment of policyholders. This includes the way premium rates are charged, the way insurers handle claims and other responsibilities under state law. These reviews can result in refunds for consumers, fines and corrections in business practices, as well as other remedies. In the last five years, Market Conduct enforcement actions have generated nearly $20 million in payments from insurance companies. The money goes toward refunds for consumers, general revenue and the Missouri State School Fund.

Consumers who have complaints or questions about life and other types of insurance, can call the department's Insurance Consumer Hotline at 800-726-7390 or by visiting insurance.mo.gov.

About the Missouri Department of Insurance, Financial Institutions & Professional Registration

The Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP) is responsible for consumer protection through the regulation of financial industries and professionals. The department's seven divisions work to enforce state regulations both efficiently and effectively while encouraging a competitive environment for industries and professions to ensure consumers have access to quality products.

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