John Hancock in $26.3 million settlement with New York over canceled insurance policies




  • In Health
  • 2022-08-18 18:15:37Z
  • By Reuters
 

By Jonathan Stempel

NEW YORK (Reuters) - John Hancock Life & Health Insurance Co will pay $26.3 million to settle a New York probe that found it prematurely terminated long-term care policies before policyholders, many now dead, exhausted their benefits.

New York's Department of Financial Services on Thursday said Hancock, a unit of Canada's Manulife Financial Corp, improperly ended 156 insurance policies early between 2001 and 2019.

It said this resulted in 27,161 days of unpaid benefits, and forced insureds to pay expenses out-of-pocket or access Medicaid for coverage.

Hancock was also accused of miscalculating maximum lifetime benefits when insureds used less than the maximum daily benefits under their policies.

The $26.3 million payment includes a $2.5 million civil fine, $21.6 million of restitution to policyholders or their beneficiaries, and $2.2 million to New York's Medicaid program.

Approximately 21 living and 130 deceased policyholders are due benefits, reflecting the nature of the policies and the passage of time.

The financial services agency said it received a consumer complaint about a premature termination in May 2019, and Hancock proposed a plan six months later to make policyholders whole.

In a statement, Hancock said it was committed to putting customer needs "at the forefront," and worked diligently with New York authorities to ensure people affected by its "administrative error" received the benefits they were owed.

(Reporting by Jonathan Stempel in New York; Editing by Matthew Lewis)

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