PRESS RELEASE: The following content has been reprinted in whole or part from a government-supplied press release.
Aetna Life Insurance Co. will pay a $500,000 penalty for consumer protection violations in New York, according to the state’s Department of Financial Services (DFS).
A DFS investigation found that Aetna repeatedly used policy forms that violated New York insurance iaw for certain group life insurance policies and failed to inform policyholders of the rights and benefits guaranteed under those policies, according to a statement from New York officials.
“When insurance companies fail to comply with their consumer protection requirements, it can prevent New Yorkers from making informed choices,” said Benjamin M. Lawsky, superintendent of New York’s DFS. “We will take action whenever insurers leave consumers in the dark about their rights and benefits.”
A DFS investigation uncovered that Aetna had used noncompliant consumer policy forms between 2002 and 2011 for six group life insurance policies. Consequently, during that period, Aetna failed to inform the insured policyholders of all rights and benefits under those policies.
One such undisclosed benefit included the right – for a longer period than was disclosed in the policy forms – of an individual within a group policy to continue their coverage under an individual policy in the event the group policy is canceled, according to DFS, meaning a consumer may not be aware of that benefit and may not take advantage of it.