BOSTON (Legal Newsline) -- Massachusetts Attorney General Martha Coakley announced Friday a $40,000 settlement with a life insurance company to resolve allegations that it provided erroneous information to consumers.
A technical error in John Hancock Life Insurance Company's policy production system allegedly caused the company to send incorrect forms to policyholders. The forms allegedly misinformed the consumers about coverage levels for assisted living residences.
"Consumers must receive accurate information so that they can avoid being trapped in a policy that doesn't best provide for their needs," Coakley said in a statement. "We are pleased that John Hancock has agreed to provide full coverage and restitution to the consumers who were misinformed."
The incorrect forms provided by John Hancock allegedly indicated that the company would provide an assisted living residence daily benefit equal to 100 percent of the consumer's home health care daily benefit.
In the actual policies, however, John Hancock only provided an 80 percent assisted living residence daily benefit.
Nine consumers were affected by the erroneous forms and entered assisted living residences only to have 80 percent of expenses covered.
Under the terms of the settlement, John Hancock will give the nine policyholders the right to receive the retroactive reimbursements required for 100 percent coverage, which totals more than $40,000 for previous care. The agreement will also apply to future claims.
John Hancock cooperated with the attorney general throughout the inquiry, Coakley's office noted.