Conseco Life Insurance Settles Allegations of Bad Faith
Conseco Life Insurance Company has agreed to an $11 million settlement with 37 states over allegations of bad faith insurance practices – specifically involving its Lifetrend life insurance policies. The settlement came after a multistate insurance investigation based on consumer complaints over increased policy costs. Bad faith insurance lawyerssay that these types of practices are why Conseco was voted one of the top ten worst insurance companies in America.
Conseco Life Bad Faith Insurance Settlement
Conseco Life Insurance Company has settled a multi-state insurance investigation for $11 million after the company sent notices to policyholders of increased policy costs in 2008 regarding its Lifetrend life insurance products. Led by the Florida Office of Insurance Regulation and with the assistance of insurance regulators in California, Iowa, Indiana and Texas, Conseco must establish a $10 million fund for certain owners of those life insurance policies and pay a $1 million fine.
The settlement agreement also requires Conseco Life Insurance Company and its affiliates, which include Conseco Insurance Company, Conseco Health Insurance Company, Bankers Life & Casualty Company and Washington National Insurance Company, to improve their processes for identifying and correcting administrative system issues. Those processes will be monitored for two years by state insurance regulators.
Allegations of bad faith insurance practices by Florida's Office of Insurance Regulation had been mounting before the settlement. In fact, the Office was ready to suspend or revoke Conseco's license due to alleged mismanagement, misleading of consumers and withholding information from the Office.
Conseco Voted One Of The Top Ten Worst Insurance Companies
The current multistate settlement over Lifetrend insurance policies is not the first time that Conseco has been called to task over its bad faith insurance practices. Conseco was voted one of the top ten worst insurance companies in America over allegations that it delayed or denied long term care insurance benefits to elderly policyholders as well as engaged in false advertising, price increases and questionable claim handling processes. In fact, Conseco's unethical business practices resulted in the National Association of Insurance Commissioners (NAIC) fining the company $2.3 million, ordering it to reimburse policyholders to the tune of $4 million and to requiring it to spend $26 million to improve its processes in 2008.