Source: http://www.state.me.us/pfr/insurance/consent_agreements/2010-2014/12204.htm
Timestamp: 2014-12-25 00:10:04
Document Index: 774780006

Matched Legal Cases: ['§ 359', '§ 359', '§ 359', '§ 352', '§ 352', '§ 352', '§ 402', '§ 408', '§ 359', '§ 359']

This Consent Agreement is entered into by and among FIDELITY AND GUARANTY INSURANCE CO., METLIFE INSURANCE COMPANY OF CONNECTICUT, UNITED STATES FIDELITY AND GUARANTY CO., TRAVELERS CASUALTY AND SURETY CO., PHOENIX INSURANCE CO., TRAVELERS CASUALTY INSURANCE COMPANY OF AMERICA, TRAVELERS INDEMNITY COMPANY OF AMERICA, TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, ST. PAUL MERCURY INSURANCE CO., ST. PAUL FIRE AND MARINE INSURANCE CO., ST. PAUL GUARDIAN INSURANCE CO., STANDARD FIRE INSURANCE CO., CHARTER OAK FIRE INSURANCE CO., DISCOVER PROPERTY AND CASUALTY INSURANCE CO., FARMINGTON CASUALTY CO., AND TRAVELERS COMMERCIAL CASUALTY CO., each of which is a subsidiary of the Travelers Insurance Group (collectively, the “Com­panies” or “Travelers Insurance Group”; individually, a “Company”), the Maine Superintendent of Insurance (the “Superinten­dent”), and the Office of the Maine Attorney Gen­eral (the “Attorney General”). Its purpose is to bring to a halt, without resort to an adjudicatory proceeding, violations of 39-A M.R.S.A. § 359(2) certified to the Superintendent by the Maine Workers’ Compensation Board (the “Board”) pursuant to that provision.
Fidelity & Guaranty Insurance Co.
PCF832
PCF608
PCF348
PCF557
PCF935
PCF585
PCF711
PCF576
PCF575
St. Paul Guardian Insurance Co.
PCF701
PCF584
Charter Oak Fire Insurance Co.
PCF403
Discover Property & Casualty Insurance Co.
PCF92565
Farmington Casualty Co.
PCF995
Travelers Commercial Casualty Co.
PCF83507
Each Company has authority to insure employers for claims arising under the Maine Workers’ Compensation Act of 1992, M.R.S.A. Title 39-A, as amended, and regulations of the Board issued there­under (the “WCA”).
In October, 2007, the Board’s Monitoring Audit & Enforcement Division (the “MAE Divi­sion”) audited the records of the Companies with respect to claims filed under the WCA with dates of injury in 2006. This audit focused on compli­ance with WCA requirements for: form filing, timeli­ness of indemnity payments, and accuracy of indemnity bene­fits.
On March 10, 2010, the Board issued a Compliance Audit Report detail­ing its findings (the “Report”). 5.
In August, 2010, the Board and the Travelers Insurance Group entered into 23 consent decrees, in lieu of administrative hearings, addressing the findings in the Report. In one such decree (the “Consent Decree”), the Travelers Insurance Group agreed that it had “engaged in patterns of questionable claims-han­dling tech­niques in violation of Section 359(2)” of the WCA for the following reasons: (a) issues of non-compliance found in 2008 audit similar to findings in 2004 audit, (b) compliance rates of the 2004 corrective action plan and market conduct examination not consistently maintained, (c) failure to timely file forms with the Board, (d) reporting incorrect information on Board forms, (e) failure to distribute Board forms in accordance with Rules and Regulations, (f) failure to pay benefits timely, and (g) failure to pay or accurately pay claims.
On August 16, 2010, the Board certified these findings to the Superintendent as required by 39-A M.R.S.A. § 359(2).
Travelers and its claim administrators have voluntarily participated in multiple WCB training sessions that were held for all carriers, including as recently as April 14 – 15, 2011.
Each Company violated 39-A M.R.S.A. § 359(2) by engaging in a pattern of ques­tion­able claims-handling techniques and/or repeated unreasonably contested claims through December 31, 2006. The Superintendent is required, pursuant to the Board’s August 16, 2010 certification of its findings that each Company engaged in a pattern of ques­tion­able claims-handling techniques and/or repeated unreasonably contested claims, to take appropriate action to bring those practices to a halt. IV
Each Company shall comply with each provision of this Agreement. However, the Companies may, unless otherwise provided herein, act as a group to comply with any affirmative obligation under this Agreement, including delivering to the Superintendent the reports and certifications pursuant to paragraphs 14 and 15, provided that (a) each Company shall take all necessary steps to authorize any group action on its behalf, and (b) all Companies wishing to act as a group remain affiliated with each other. Each Company acknowledges and agrees that a breach of this Agreement resulting from any group action shall constitute an individual breach of this Agreement by each Company.
Each Company shall bring to a halt the pattern of questionable claims-han­dl­ing tech­niques and/or unreasonably contested claims as set forth in this Agreement.
Within thirty (30) days after executing this Agreement, the Companies shall adopt, and deliver to the Superintendent for approval, with a copy to the WCB Deputy Director, MAE Division, written procedures that ensure that all claims for indemnity benefits under the WCA are paid in compli­ance with Maine law. At a minimum, such procedures must include plans for:
ensuring supervisory and front-line staff are experienced in handling workers’ compensation claims in Maine; training in-house and third-party administrator claims personnel on the provisions of the WCA concerning derivation of benefit levels from average weekly wages and accuracy of indemnity payments;
ensuring that third-party administrators working on behalf of the Travelers Insurance Group comply with the requirements of the WCA;
auditing, on at least a quarterly basis, all indemnity claims, excluding those claims audited by the Board as part of the 2011 Claims Audit, to measure compliance with the bench­marks in Exhibit A.
The Travelers Insurance Group shall deliver to the Superintendent and the WCB Deputy Director, MAE Divi­sion, the results of the audits referred to in sub­paragraph (h) for four (4) suc­ces­sive calendar quarters starting with the quarter in which the Travelers Insurance Group executes this Agreement. The Travelers Insurance Group shall deliver each audit report within thirty (30) days after the end of the applicable calendar quarter. Within forty-five (45) days thereafter, the Superinten­dent may call a meeting with the Travelers Insurance Group to discuss any concerns he may have with the Traveler Insurance Group’s claims performance during the period covered by such audit report. Failure to call any such meeting shall not waive any of the Super­in­tendent’s or the Attorney General’s rights under this Agreement. The Travelers Insurance Group shall deliver with the last audit report (the “Final Self-Audit Report”), a certification in the form attached as Exhibit B, attesting to the accuracy of all claims performance audit infor­mation required under this Agreement. The Travelers Insurance Group shall also deliver, upon the Superintendent’s or the WCB Deputy Director’s request, any and all work papers and documents, in any format, in its possession, custody or control, related to any Self-Audit Report.
The Travelers Insurance Group shall, for the period starting January 1, 2007 and ending December 31, 2010:
submit to the Bureau of Insurance within 30 days of the execution of this Agreement, an electronic spreadsheet listing all claims adjusted in the above time periods, excluding those discharged under 39-A M.R.S.A § 352, for the purpose of allowing the Bureau to designate a statistically valid random sample of claims, for each calendar year (the “Designated Claims”), for further review by the Companies;
deliver to the Superintendent and the WCB Deputy Director, MAE Division, by the date the Travelers Insurance Group must deliver the Final Self-Audit Report, an electronic spreadsheet report viewable in Microsoft Excel listing each claim so reviewed (the “Look-Back Report”). The Look-Back Report shall contain the follow­ing data, safeguarded in accordance with the WCA, for each Designated Claim: the Board number, if known;
the claim­ant’s Social Security number (gen­eral for­mat/no dashes); the claimant’s last and first name (in that order); the date of injury; Com­pany name and claim file num­ber; the incapac­ity periods; the amount of indem­nity originally paid; whether or not the claim was settled under 39-A M.R.S.A. § 352 (Y or N) and the date of such settlement; the amount of indem­nity paid after review; the amount of penal­ties paid after review; the amount of inter­est paid after review; the amount of overpayment upon review; and the name of the person con­ducting the review. The Travelers Insurance Group shall deliver with the Look-Back Report a certification attesting to the accuracy of all information in the report, in the form attached as Exhibit B. This paragraph shall not apply to any claims that are subject to the audits described in paragraph 14, to any claims that have been discharged under 39-A M.R.S.A § 352, or to any claims that were previously presented to any Company or third-party administrator work­ing on behalf of a Company that were previously audited by the Board and subse­quently corrected by the Company or third-party administrator. Should the Superin­tendent, in his sole and absolute discretion, determine, within twelve (12) months after receiving the (i) Final Self-Audit Report or (ii) Look-Back Report, that the Companies either:
on an aggregate basis, did not meet or exceed on average the benefit payment and form filing bench­marks in Exhibit A during the self-audit review period described in paragraph 14, then each Company shall deliver a civil penalty of Two Thousand Five Hundred ($2500) to the Superintendent within thirty (30) days of receiv­ing the determination, and/or
failed to correct deficiencies in indemnity benefits as required by paragraph 15.d, including penalties and interest due thereon, pursuant to the WCA, or as may be further required pursuant to paragraph 17, resulting in compliance with the WCA in less than 93 percent of claims required to be reviewed pursuant to those paragraphs, then each Company shall deliver a civil penalty of One Thousand Dollars ($1000) to the Superintendent within thirty (30) days of receiv­ing the determination.
Each Company agrees that (i) any civil penalties assessed under subsection (a) or (b) above will have resulted from its continued failure through the delivery date of either the Final Self-Adult Report or the Look-Back Report, to halt the pattern of ques­tionable claims-handl­ing tech­niques established by the Consent Decree, (ii) in declaring the Civil Penalty due, the Super­in­tendent may rely on the Self-Audit Reports and the Look-Back Report as conclusive evidence of the fact and extent of such failure, and (iii) the amount of this penalty will not limit fur­ther measures, penalties or remedies that the Superinten­dent or the Attorney General may impose or seek under paragraph 27 below.
Should the Superintendent, in his sole and absolute discretion, determine within twelve (12) months after receiving either the Look-Back Report or the Board’s report of the 2011 Claims Audit, that the Companies in aggregate, for any calendar year for which claims were reviewed, failed to achieve a 93% compliance rate in accurately calculating either (a) average weekly wage, (b) weekly compensation rate, (c) partial benefits, or (d) indemnity, the Companies shall review all claims paid in each calendar year in which the Companies were noncompliant for the specific purpose of identifying and correcting inaccurate payments to claimants. Should the Superintendent order such an expanded review, the Companies shall within 12 months complete the review and submit a report to the Superintendent setting forth the process employed to conduct the review and the results of the review. The Companies shall provide, upon the Superintendent’s request, any additional documentation reasonably necessary for the Superintendent to verify that the review was properly completed.
The Companies shall pay, as provided by law, the Superintendent’s reason­able costs and expenses of monitoring their compliance with, and enforcing the Companies’ obligations under, this Agreement. The Companies shall be jointly and severally liable for these costs and expenses.
The Travelers Insurance Group shall ensure that third-party administrators working on its behalf comply with the WCA and this Agreement. The Companies acknowledge their continued responsibility for the actions of any third-party.
any action that may be taken by the Superintendent pursuant to this Agreement, including but not limited to the imposition of the penalty specified in paragraph 16 and agree they will make no appeal from this Agreement; and
objection to the Board’s release to the Superintendent and the Attorney General of claim of confidentiality of Board “audit working papers,” as defined in section 153 of the WCA, related to any audit of any Company and, in connection with this waiver, to the use of such papers by the Superintendent and Attorney General for purposes related to the implementation and enforcement of this Agreement. The Companies acknowledge that this Agreement is a public record within the meaning of 1 M.R.S.A. § 402 and will be available for public inspection and copying as provided for by 1 M.R.S.A. § 408, and will be reported to the Regulatory Information Retrieval System database at the National Association of Insurance Commissioners.
This Agreement does not bind any person or entity not a party to this Agreement, or limit the Superintendent’s ability to seek any available legal remedy for any viola­tions of the WCA or the Maine Insurance Code against any Travelers Insurance Group affiliate or subsidi­ary not a party to this Agreement or against any entity from which any Company obtains WCA claims administrator services.
Nothing in this Agreement shall limit the ability of the Superintendent, in his sole and absolute discretion, in order to determine whether any Company has brought to a halt all violations of 39-A M.R.S.A. § 359(2) established by the Consent Decree, to investigate:
the handling of the Travelers Insurance Group’s indemnity claims having dates of injury after December 31, 2006;
the accuracy of the self-audit quarterly review described in paragraph 14; or
the accuracy of the indemnity claim review described in paragraph 15;
any other matters involving potential violations of the WCA or the Maine Insurance Code.
The purpose of the self-audit quarterly review described in paragraph 14 and the indem­nity claim review described in paragraph 15 is to bring to a halt the violations established by the Consent Decree. Therefore, in consideration of the Companies’ execution of this Agreement, the Superintendent and the Attorney General shall not pursue civil penalties, disciplinary measures or other civil or administrative sanctions, other than those agreed to herein, for violations established by the Consent Decree that continue through the period of the paragraph 14 and paragraph 15 reviews. However, the Superintendent or the Attorney General may pursue any available legal remedy, including without limitation imposition of additional civil penalties and the limitation, suspension or revocation of workers’ compensation authorities issued to any Company by the Superintendent should any Company:
a. engage in conduct that violates 39-A M.R.S.A. § 359(2) after the period of the paragraph 14 and paragraph 15 reviews; or