Conseco and Bankers Life
The Conseco insurance group (Bankers Life and Casualty, Conseco Senior Health Insurance, and Colonial Penn Life) provides long-term care insurance (LTCI), a relatively new type of insurance that is designed to help pay the costs of an individual's:
- home health care (whether from a paid provider or family/friends)
- nursing home care
- comprehensive care (both home care and nursing home care)
Conseco Agrees to Pay a Fine, Possible Remediation, and More
In May 2008, Conseco settled a multistate case involving its LTCI provided by its subsidiary, Conseco Senior Health Insurance (CSHI). Conseco agreed to pay a $2.3 million fine and provide up to $4 million in remediation. The company also agreed to start using several steps to meet performance standards regarding the on-time processing of LTCI claims.
Conseco's Transfer of LTCI Policies to a Trust
Moreover, in late 2008, Conseco transferred thousands of its LTCI policies to a separate nonprofit trust that is supervised by the State of Pennsylvania (the trust is called Senior Health Insurance Co. of Pennsylvania). This unprecedented casting-off of insurance policies affects over 125,000 people who have CSHI long-term-care policies.
Pennsylvania is the location of Conseco's LTCI unit, although the headquarters of Conseco, a Fortune 500 corporation, are in Indiana. The insurance commissioner in Pennsylvania, Joel Ario, defended Conseco's transfer of policies, saying that without the transfer of policies to the trust, "The likely result would have been either substantial rate increases or insolvency."
Increase in Premiums Likely
The holders of the Conseco LTCI policies that were transferred were not warned or even told of the transfer, and it is now still quite possible that they will have to pay significantly increased rates just to keep their policies active. Conseco is walking away from its responsibilities to its policyholders, and many individuals are understandably upset—to the point of filing a lawsuit.
Long-term care insurance is an ever-growing segment of the insurance industry, since so many baby boomers (born in the years 1946–1964) are reaching the age where they may need LTCI. In fact, it has been estimated that an individual who is about 65 years old today has a 70 percent chance of needing some kind of long-term care. According to the Health Insurance Association of America, the average lifetime cost of long-term care for someone over 65 is around $150,000.
Get Legal Help Today
If you have concerns about a Conseco or other provider's LTCI policy, contact us today to schedule a private consultation with an experienced bad faith insurance lawyer who will investigate your claim and fight to protect your legal rights.
Be assured your matters will be in experienced & caring hands.
