Coakley settles allegations against life insurance company
BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced a consent judgment on Tuesday against Life Insurance of North America resolving allegations that it marketed its insurance deceptively to veterans.
The consent judgment, filed with Coakley's lawsuit on Monday in Suffolk Superior Court, alleges that LINA violated the state's Consumer Protection Act by deceptively marketing and administering its supplemental health products to veterans in Massachusetts. LINA allegedly marketed surgical and cancer insurance using improper tactics to more than 1,000 veterans in the state, particularly World War II veterans.
"The conduct in this case is greatly disconcerting because LINA specifically targeted World War II veterans who deserve our deepest gratitude for their service to our country," Coakley said. "LINA misrepresented the coverage it offered veterans and their families. Through this judgment, veterans harmed by this company will receive restitution and we will be able to provide funding for additional programs to support veterans' services."
LINA allegedly deceptively billed Massachusetts residents, misrepresented coverage limits, exaggerated benefits, made false claims about its rates, illegally denied coverage based upon preexisting conditions and misrepresented its insurance as a governmental veteran's benefit.
Since 2007, LINA has offered supplemental health insurance to residents in Massachusetts, including two particular policies. One is a cancer-only policy and the other is a hospital indemnity policy offering outpatient surgical benefits. The lawsuit alleges that LINA marketed its health insurance to veterans through internet and direct mail solicitations in deceptive ways, including misleading marketing that made the insurance seem like a government program and that misrepresented the value of its benefits.
Under the terms of the consent judgment, LINA must pay a minimum of $650,000 in consumer relief for residents in Massachusetts who were sold the insurance plans through allegedly deceptive marketing, pay $55,000 to the state for attorney costs, send letters to consumers entitled to relief and refund consumers who purchased the supplemental insurance coverage the amount of premiums they paid minus any collected insurance claims.
LINA must pay an additional $1 million to the state as a deterrent, with $500,000 representing a civil penalty and $500,000 used to promote initiatives to assist military veterans, seniors and residents with mental health conditions or to stop unlawful marketing practices targeted at such individuals.
LINA terminated the plans in Massachusetts and the consent judgment also requires LINA to provide consumers with proper notice of the termination. After affected consumers have been compensated, the state will receive the remaining portion of the $650,000.