HealthMarkets & Mega Life Health & Insurance Companies have been accused of illegally recording hundreds of telephone calls during insurance claim investigations that violate wiretap and privacy laws. The accusations, which are part of a class action lawsuit, come after the insurers' recent $20 million multi-state insurance settlement for bad faith insurance practices.

Class action lawsuit filed

According to news reports, Jerry Hopkins had insurance with Mega Life and Health Insurance Company. During its investigation of a claim, the company recorded a telephone call to him in violation of California wiretap and privacy laws. It wasn't until Hopkins sued the insurer for bad faith insurance practices that it was discovered that the company had been illegally recording the telephone conversations with hundreds of its insurers. Hopkins has brought a class action lawsuit against the insurers seeking an injunction and punitive damages.

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New accusations come on heels of $20M bad faith insurance settlement

The new accusations against the insurers come on the heels of a $20 million settlement with states for bad faith insurance practices. The multi-state settlement with HealthMarkets and its affiliated companies, MEGA Life and Health Insurance Company, Mid-West National Life Insurance Company and Chesapeake Life Insurance Company, was announced in 2008. They agreed to pay $20 million for bad faith practices in the areas of claims handling, rescinding policies and a host of other violations. The companies may be fined another $10 million in 2009 if they do not improve their practices in the areas of:

• Claims handling
• Complaints and grievances
• Agent training and oversight
• Identification of company
• Transparency of the companies' relationship with associations
• Establishing and maintaining a compliance program
• Cancellation, non-renewal and discontinuance notices

The insurers don't seem to be off to good start in the new year. Federal and state wiretapping are fairly straightforward. With a few narrow exceptions, recording phone calls without the permission of the other party violates wiretapping and privacy laws.

If your insurance company has treated you in bad faith, contact an experienced mega life attorney to discuss your situation and evaluate your options. Consultations are free of charge, without obligation and are strictly confidential.

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