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What the $77 Million CIGNA Settlement Means for Denied Policyholders in California

America’s top disability attorney, Frank N. Darras, offers critical information for Californians denied benefits from CIGNA Health and Life Insurance Company and its subsidies, Connecticut General Life Insurance Company and Life Insurance Company of North America. Following an investigation conducted by five lead states, including California, CIGNA was ordered to pay around $1.6 million in fines and fees. They have also set aside $77 million for projected payments to policyholders whose claims weren’t handled properly.

“Policyholders want to know what this means for them and what they should do about it now. All affected policyholders which includes those whose claims were handled between January 1, 2008 to December 31, 2010, should know that they have a right to have their claim reviewed. In fact, any consumer who believes their claims may have been mishandled and were processed prior to or following the examination date should have their claim looked at again,” says Darras.

According to CIGNA spokeswoman Amy Turkington, the company has updated its claims-handling processes as state standards for claims procedures have evolved overtime. As part of the settlement, CIGNA has agreed to voluntarily review an isolated subset of claims under now updated standards. Under this settlement, CIGNA is also required to enhance claims procedures in the future and participate in a two-year monitoring program conducted by the insurance departments of the five lead states.

Darras advises affected policyholders to take these steps within 60 days from the date of notice in order to be reconsidered:

1. If the consumers claim for disability insurance benefits was denied or terminated on or after January 1, 2008, and before December 31, 2010 by or one of its subsidies, they are entitled to have their claim reevaluated under new claims standards

2. If CIGNA notifies the policyholder to ask for reassessment of their claim and they responded timely to the letter, they do not need to make a new request

3. If a notice was never received, the policyholder should request a reassessment now by calling the department’s Consumer Services Division toll free at 800-927-4357 (HELP)

4. If policyholders are unsure if they qualify or have questions about the claim re-evaluation process, the companies have set up a temporary telephone line at 855-625-5518.

“If you feel your claim qualifies to be reviewed, you should take action now. Failure to do so within the allotted time frame will result in a loss of this opportunity to have your claim reassessed. Also know that by asking for your claim to be reassessed, you waive certain legal rights in the event your benefits are paid to you. These rights may be outlined in a notice document. I highly recommend that policyholders contact a top disability lawyer or firm, before giving up any of your rights,” says Darras.

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