The Commerce Department announced Friday a civil penalty of $20,000 against Bankers Life and Casualty Company stemming from complaints about the long-term care insurer failing to pay timely claims and pay interest as required by state law.
The order, which brings $2,500 in restitution to one policyholder, also followed complaints the insurer did not properly determine policy eligibility periods, according to a Commerce Department news release.
Indiana-based Bankers Life did not immediately respond to a phone call or e-mail message seeking comment.
“Consumers invest in long-term care insurance so that when the time comes, they will have coverage for care expenses,” said Commerce Commissioner Mike Rothman in a statement. “The department is here to make sure that consumers receive all of the benefits that their insurance companies should be covering.”
Commerce investigated after receiving complaints about Bankers Life and Casualty Company’s handling of long-term care insurance claims. The department determined after reviewing claims that an administrative action against the company’s license and remedial action was needed.
The company must review more than 100 past long-term insurance claims to determine if they were properly handled. The review must be conducted by an independent reviewer that’s approved by the Commerce Department, according to a consent order dated March 11.
“If any claims were improperly decided, the company is required to pay claimants any additional money owed, along with interest,” the Commerce Department said in a news release. “All payments are required to be made within 30 days of the determination that an additional claim payment is due.”