Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, February 9, 1995 TAG: 9502100064
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: Associated Press
DATELINE: RICHMOND LENGTH: Medium
The bureau also says the company's handling of some claims may have been illegal.
For 15 months, the Bureau of Insurance has been unable to get Trigon to promise to end the practices in question, Insurance Commissioner Steven Foster said. As a result, he asked Tuesday that the State Corporation Commission hold a hearing next month on the practices.
``They've been unwilling to take steps to come into compliance,'' Foster said. ``I've run out of patience.''
A Bureau of Insurance review of 34 ads for Trigon's individual, group, Medicare supplement and long-term care policies found 214 apparent violations of state law and regulations.
The report said some of Trigon's advertisements touted benefits it did not offer and improperly claimed that the company offered services other insurers did not. Some ads, the report said, referred to discounts on dental care and eye care when neither were covered benefits.
``Most of the issues raised in that audit have been addressed and corrected by the company, and the few that haven't yet been corrected are being addressed at the present time,'' said Trigon Senior Vice President Joseph Macrum.
``We take all issues raised in audits of this type seriously, and once we have agreed with the bureau, we address the issues promptly,'' he said.
Trigon could face fines and orders to change its ways of operating if the SCC agrees with the bureau's findings.
The problems emerged in a routine bureau review of Trigon's operation, a market conduct examination, which covered 1991 and 1992 and was completed in 1993.
The examination started before a bureau investigation into the way Trigon calculated policyholders' insurance co-payments, in which regulators said Trigon violated state law by misleading policyholders about their benefits. Trigon paid a $5 million fine and refunded tens of millions of dollars of excess co-payments to settle those allegations.
In addition to the advertising, the market conduct report found apparent widespread problems with the way Trigon handled some policyholders' claims.
Trigon's alleged failure to obey state law on acknowledging that it has received claims, on notifying policyholders when it denied their claims, and on settling claims within state-set deadlines ``occurred with such frequency as to indicate a general business practice,'' the bureau report said.
The study also found that Trigon had not paid policyholders interest it had owed on their claims. That problem involved group policies.
The study also said Trigon was not living up to provisions in its group policies in which it promises to keep handling claims when the employer holding the group policy is late making premium payments. Trigon gives such policyholders 60 days before canceling their insurance.
The SCC ordered a March 22 hearing into a wide range of Trigon's marketing and claims practices.
by CNB