California Department Eyes LTC Block
September 26, 2011 by Allison Bell
The California Department of Insurance has filed an administrative
enforcement action against a life insurer in connection with allegations of
problems with the handling of long term care (LTC) insurance claims and other
claims.
The California department says RiverSource Life Insurance Company, a unit of
Ameriprise Financial Inc., Minneapolis (NYSE:AMP), reduced LTC policyholders’
ability to collect on claims by making it difficult for policyholders to
determine which LTC facilities RiverSource would pay for and requiring
facilities to comply with strict, “antiquated policy language” to qualify to
receive reimbursement.
The department also found problems with payments of disability income and
life insurance claims, officials say.
Ameriprise notes in a statement that allegations stem from a period that
ended more than 3 years ago.
“The allegations relate primarily to a closed legacy book of long term care
business,” Ameriprise says. “Claims on that book are administered by a third
party. RiverSource strongly disagrees with the Department’s allegations and
conclusions. RiverSource is committed to fair claims handling practices and
compliance with applicable laws and regulations in California and all states
where it does business.”
– Allison Bell