Source: http://www20.insurance.ca.gov/epubacc/report/84733.htm
Timestamp: 2014-11-24 02:26:50
Document Index: 308131530

Matched Legal Cases: ['art 2', '§2695', '§2695', '§2695', '§2695', '§2695', '§2695', '§2695', '§2695']

PUBLIC REPORT OF THE MARKET CONDUCT EXAMINATION OF THE CLAIMS PRACTICES OF THE BANKERS LIFE AND CASUALTY COMPANY NAIC # 61263 CDI # 2254-1 AS OF JANUARY 31, 2005 STATE OF CALIFORNIA DEPARTMENT OF INSURANCE MARKET CONDUCT DIVISION FIELD CLAIMS BUREAU TABLE OF CONTENTS SALUTATION.......................................................................................1 SCOPE OF THE EXAMINATION...............................................................2 CLAIMS SAMPLE REVIEWED AND OVERVIEW OF FINDINGS......................3 TABLE OF TOTAL CITATIONS.................................................................5 TABLE OF CITATIONS BY LINE OF BUSINESS...........................................6SUMMARY OF RESULTS.........................................................................8 STATE OF CALIFORNIA
June 15, 2006 The Honorable John Garamendi Insurance Commissioner State of California 45 Fremont Street San Francisco, California 94105 Honorable Commissioner: Pursuant to instructions, and under the authority granted under Part 2, Chapter 1, Article 4, Sections 730, 733, 736, and Article 6.5, Section 790.04 of the California Insurance Code; and Title 10, Chapter 5, Subchapter 7.5, Section 2695.3(a) of the California Code of Regulations, an examination was made of the claims practices and procedures in California of: Bankers Life and Casualty Company NAIC # 61263 Group NAIC # 0233 Hereinafter referred to as BLCC, the Company. This report is made available for public inspection and is published on the California Department of Insurance web site (
www.insurance.ca.gov) pursuant to California Insurance Code section 12938. SCOPE OF THE EXAMINATION The examination covered the claims handling practices of the aforementioned Company during the period February 1, 2004, through January 31, 2005. The examination was made to discover, in general, if these and other operating procedures of the Company conform with the contractual obligations in the policy forms, to provisions of the California Insurance Code (CIC), the California Code of Regulations (CCR), the California Vehicle Code (CVC) and case law. This report contains only alleged violations of Section 790.03 and Title 10, California Code of Regulations, Section 2695 et al. The alleged violations of other relevant laws which resulted from this examination are included in a separate report which will remain confidential subject to the provisions of CIC Section 735.5. To accomplish the foregoing, the examination included: 1. A review of the guidelines, procedures, training plans and forms adopted by the Company for use in California including any documentation maintained by the Company in support of positions or interpretations of fair claims settlement practices. 2. A review of the application of such guidelines, procedures, and forms, by means of an examination of claims files and related records. 3. A review of consumer complaints received by the California Department of Insurance (CDI) in the most recent year prior to the start of the examination. The examination was conducted at the California Department of Insurance office in Los Angeles, California. The report is written in a "report by exception" format. The report does not present a comprehensive overview of the subject insurer's practices. The report contains only a summary of pertinent information about the lines of business examined and details of the non-compliant or problematic activities or results that were discovered during the course of the examination along with the insurer's proposals for correcting the deficiencies. When a violation is discovered that results in an underpayment to the claimant, the insurer corrects the underpayment and the additional amount paid is identified as a recovery in this report. All unacceptable or non-compliant activities may not have been discovered. Failure to identify, comment on or criticize activities does not constitute acceptance of such activities. Any alleged violations identified in this report and any criticisms of practices have not undergone a formal administrative or judicial process. CLAIM SAMPLE REVIEWED AND OVERVIEW OF FINDINGS The examiners reviewed files drawn from the category of Closed Claims for the period February 1, 2004, through January 31, 2005, commonly referred to as the "review period". The examiners reviewed BLCC claim files. The examiners cited 9 claim handling violations of the Fair Claims Settlement Practices Regulations and/or California Insurance Code Section 790.03 within the scope of this report. Further details with respect to the files reviewed and alleged violations are provided in the following tables and summaries. Bankers Life and Casualty Company
Life/Individual Life
Annuity/Life Annuity
Accident And Health/Long Term Care/Home Health Care
Accident And Health/Short Term Care
Accident And Health/Major Medical,Hospital Surgical & Medical Surgical
Accident And Health/Bankers Life And Dread Disease 9
Accident And Health/Disability Income 712
Accident And Health/Accident
Accident/Hospital Indemnity 76
Description BLCC
LIFE/INDIVIDUAL LIFE NUMBER OF CITATIONS
ANNUITY/ANNUITY LIFE
ACCIDENT AND HEALTH/LONG TERM CARE & HOME HEALTH CARE
ACCIDENT AND HEALTH/SHORT TERM CARE NUMBER OF CITATIONS
ACCIDENT AND HEALTH/MAJOR MEDICAL, HOSPITAL SURGICAL & MEDICAL SURGICAL
ACCIDENT AND HEALTH/DREAD DISEASE
ACCIDENT AND HEALTH/DISABILITY INCOME
ACCIDENT AND HEALTH/HOSPITAL INDEMNITY
9 SUMMARY OF RESULTS The following is a brief summary of the criticisms that were developed during the course of this examination related to the violations alleged in this report. This report contains only alleged violations of Section 790.03 and Title 10, California Code of Regulations, Section 2695 et al. In response to each criticism, the Company is required to identify remedial or corrective action that has been or will be taken to correct the deficiency. Regardless of the remedial actions taken or proposed by the Company, it is the Company's obligation to ensure that compliance is achieved. There were no recoveries discovered within the scope of this report. INDIVIDUAL LIFE 1. In one instance, the Company failed to acknowledge notice of claim within 15 calendar days. The Department alleges this act is in violation of CCR §2695.5(e)(1). Summary of Company Response: It is the Company's procedure to acknowledge notice of claims. On March 1, 2006 the Company sent notices to all agents, managers and administrators to remind them to immediately notice the Home Office upon receipt of a death notification. The Company also provided re-training on this issue for the Company's customer service representatives. 2. In one instance, the Company failed to provide written notice of the need for additional time every 30 calendar days. The Department alleges this act is in violation of CCR §2695.7(c)(1). Summary of Company Response: It is the Company's procedure to provide written notice of the need for additional time every 30 calendar days. On April 7, 2006 the Company provided re-training on this issue for the customer service representatives. The Company created a standardize form to help the customer service representative meet this requirement. 3. In one instance, the Company failed to disclose all benefits, coverage, time limits or other provisions of the insurance policy. The Department alleges this act is in violation of CCR §2695.4(a). Summary of Company Response: The individuals involved have been made aware of these compliance issues. April 7, 2006 the Company created a standardize form to help the customer service representative meet this requirement. 4. In one instance, the Company failed to include a statement in its claim denial that, if the claimant believes the claim has been wrongfully denied or rejected, he or she may have the matter reviewed by the California Department of Insurance. The Department alleges this act is in violation of CCR §2695.7(b)(3). Summary of Company Response: The Company acknowledges that the denial language had not been included. On February 21, 2006 the Company issued a training memo to the staff to require them to provide this information in the denials. ANNUITY 5. The Company failed to properly document claim files. In one instance, the Company's file failed to contain all documents, notes and work papers. The Department alleges this act is in violation of CCR §2695.3(a). Summary of Company Response: The Company acknowledges that the date they received notice of claim had not been included in the claim file. On February 21, 2006 the Company issued a training memo to the staff to remind them to document the claim file with all activity. 6. In one instance, the Company failed to record claim data in the file. This instance is the result of a failure to record the date the Company received written communication from an insured. The Department alleges this act is in violation of CCR §2695.3(b)(2). Summary of Company Response: The Company acknowledges that the file activity had not been included in the claim file. On February 21, 2006 the Company issued a training memo to the staff to remind them to document the claim file with all activity. 7. In two instances the Company failed to acknowledge notice of claim within 15 calendar days. The Department alleges these acts are in violation of CCR §2695.5(e)(1). Summary of Company Response: It is the Company's procedure to acknowledge notice of claims. On March 1, 2006 the Company sent notices to all agents, managers and administrators to remind them to immediately notice the Home Office upon receipt of a death notification. The Company also provided re-training on this issue for the Company's customer service representatives. LONG TERM CARE & HOME HEALTH CARE There were no citations alleged or criticisms of insurer practices made within this category. SHORT TERM CARE 8. In one instance, the Company failed to acknowledge notice of claim within 15 calendar days. The Department alleges this act is in violation of CCR §2695.5(e)(1). Summary of Company Response: It is the Company's procedure to acknowledge notice of claims. On March 1, 2006 the Company sent notices to all agents, managers and administrators to remind them to immediately notice the Home Office upon receipt of a death notification. The Company also provided re-training on this issue for the Company's customer service representatives. MAJOR MEDICAL & HOSPITAL SURGICAL AND MEDICAL SURGICAL There were no citations alleged or criticisms of insurer practices made within this category. DREADED DISEASE There were no citations alleged or criticisms of insurer practices made within this category. DISABILITY INCOME There were no citations alleged or criticisms of insurer practices made within this category. ACCIDENT There were no citations alleged or criticisms of insurer practices made within this category. HOSPITAL INDEMNITY There were no citations alleged or criticisms of insurer practices made within this category.
Last Revised - July 06, 2006