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July 11, 2012updated 13 Apr 2017 8:43am

Health insurer to pay over $1.7m for alleged deceptive marketing

Health insurer, Life Insurance Company of North America (LINA) an operating subsidiary of US health insurer Cigna has been ordered to pay more than $1.7m for allegedly using deceptive marketing practices. The sum will be paid to consumers and the state government of Massachusetts for allegedly improperly marketing its cancer and surgical insurance to more than 1,000 Massachusetts veterans, including specifically targeting World War II veterans A complaint by Martha Coakley, the attorney general of Massachusetts, filed along with a consent judgment in Suffolk Superior Court alleged that LINA violated the states Consumer Protection Act through several deceptive practices in the marketing and administering of its supplemental health insurance products to Massachusetts veterans.

By raymond doherty

Health insurer, Life Insurance Company of North America (LINA) – an operating subsidiary of US health insurer Cigna – has been ordered to pay more than $1.7m for allegedly using deceptive marketing practices.

The sum will be paid to consumers and the state government of Massachusetts for allegedly improperly marketing its cancer and surgical insurance to more than 1,000 Massachusetts veterans, including specifically targeting World War II veterans.

A complaint by Martha Coakley, the attorney general of Massachusetts, filed along with a consent judgment in Suffolk Superior Court alleged that LINA violated the state’s Consumer Protection Act through several deceptive practices in the marketing and administering of its supplemental health insurance products to Massachusetts veterans.

For example, LINA is alleged to have:

 

  • misrepresented its insurance as a governmental veteran’s benefit,

 

  • illegally denied coverage based on pre-existing conditions

 

  • made false claims about rates

 

  • exaggerated benefits

 

  • and misrepresented coverage limits.

 

Coakley said: “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.”

Under the terms of the, consent judgement, LINA will pay a minimum of $650,000 in consumer relief for Massachusetts residents who were sold the insurance plans through allegedly deceptive means.

 

Deterrent factor

It must also pay an additional $1 million to state government of Massachusetts as a deterrent, $500,000 of which is for civil penalties and $500,000 will be used to promote initiatives designed to assist Massachusetts military veterans, seniors, or residents with mental health conditions, or to address unlawful marketing practices targeted at such individuals.

LINA will also pay the state government of Massachusetts $55,000 for the costs of the investigation.

LINA has decided to terminate these plans in Massachusetts and the consent judgment requires LINA to give proper notice of that termination.

 

 

 

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