Major insurance companies like Unum Group, Genworth Financial, and MetLife have faced financial issues in their long-term care insurance business due to underestimating the costs of future claims and longevity of policyholders. These challenges have led to significant reserve increases and stricter claims handling processes. Government investigations and lawsuits have scrutinized these practices:
These cases reflect the broader industry trend of reevaluating long-term care insurance underwriting and claims handling practices in response to financial pressures.
Major insurance companies have faced several financial issues in their long-term care insurance businesses, including underestimated life expectancies, rising healthcare costs, low-interest rates affecting reserves, and inadequate initial pricing. These challenges have led to stricter claims handling, increased premiums, and some companies ceasing to offer new policies. Investigations and lawsuits have targeted companies like Unum Group, Genworth Financial, MetLife, John Hancock, Transamerica, and Prudential, focusing on claims denials and premium rate increases, prompting regulatory scrutiny and settlements to address these practices. For detailed examples and outcomes, it’s advisable to consult specific regulatory and legal documents related to each company.
John Hancock Insurance has faced significant legal and regulatory scrutiny related to its handling of long-term care insurance policies. Here are some specific instances:
Prudential Insurance has faced legal and regulatory actions related to its long-term care insurance policies. Here are some specific examples:
Genworth Financial has been involved in several significant legal and regulatory actions related to its long-term care insurance business. Some of these include:
MetLife has been involved in various legal actions related to its long-term care insurance policies. One notable case was a class action lawsuit that alleged MetLife imposed large premium increases on policyholders after they turned 65 years old, in violation of the “Reduced-Pay at 65” rider. This rider allowed policyholders to pay higher premiums before turning 65 in exchange for reduced premiums after reaching that age. The lawsuit claimed MetLife failed to honor this agreement, leading to substantial rate increases for insureds post-65. The case, Newman v. Metropolitan Life Ins. Co., was settled with MetLife agreeing not to collect premiums beyond 50% of the pre-age 65 amount for all class members and to refund 30% of all increased post-age 65 premiums collected.
Additionally, policyholders have expressed outrage over unexpected premium increases for MetLife long-term care benefits. The “Reduced Pay at 65 Option,” which was supposed to halve premiums at age 65, reportedly did not deliver on its promise, with some policyholders experiencing a 102% increase in their premiums. These premium hikes presented policyholders with difficult choices: pay the increased rates, reduce their benefits, or drop their policies entirely, putting their financial stability and health safety at risk.
Continental Casualty Insurance, a subsidiary of CNA Financial Corp., has faced several lawsuits related to its long-term care insurance policies. These legal actions typically revolve around allegations of wrongful premium increases, denial of coverage, and deceptive practices affecting elderly policyholders.
A class action lawsuit accused Continental Casualty of engaging in illegal conduct aimed at reducing exposure to costly long-term care claims by denying claims through fraudulent, deceptive, and manipulative practices. The lawsuit also highlighted the issue of massive premium increases imposed on the elderly insureds, which contradicted the insurer’s contractual promises. This legal action pointed out that close to 400 people in Connecticut and over 20,000 nationwide could have been affected by these practices.
In another significant case, a nationwide class action settlement was reached on behalf of tens of thousands of individuals who purchased long-term care policies from Continental Casualty. The lawsuit claimed that the insurer wrongfully denied coverage on the premise that a facility’s nursing staff must be “on-site” 24 hours per day, despite no such requirement in the policy terms. This settlement was aimed at addressing these wrongful denials and ensuring fair treatment of policyholders
Bankers Life faced a class action lawsuit alleging elder abuse through wrongful denial and delay of long-term care insurance claims, breach of contract, fraud, negligence, and intentional misconduct. The suit aimed to represent a large class affected by these practices in Oregon, highlighting issues with claim denials and premium increases without corresponding benefit enhancements.
If your family has found that the long term care insurance of a loved one is being ignored or mishandled by the insurer, you are right to be concerned. Families who do not push back on their insurer and retain expert legal counsel will find that the insurance policy is ignored and claims summarily denied. Protect your family and get them they care they need by standing up for their rights and hiring counsel.
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