Cigna Settles Long-Term Disability Denial Case
Author: Gregory Michael Dell
Published: 2013/05/31 - Updated: 2025/12/18
Publication Type: Informative
Category Topic: Claims - Related Publications
Page Content: Synopsis - Introduction - Main - Insights, Updates
Synopsis: This report covers Cigna Insurance's regulatory settlement agreement following a 30-month multi-state investigation into flawed long-term disability claims handling practices. The article is authoritative because it draws directly from the settlement agreement and official findings by insurance investigators from California, Maine, Massachusetts, Connecticut, and Pennsylvania. Cigna was required to pay $1.675 million in fines and set aside $77 million to reimburse claimants, while implementing new procedures that give greater weight to Social Security disability approvals and ban performance bonuses tied to claim denials. The information is particularly useful for disability claimants who believe their claims were wrongfully denied, those with disabilities navigating insurance appeals, and anyone seeking to understand how regulatory enforcement works in disability insurance. The article includes practical guidance about the 60-day window to request reassessment and emphasizes that claimants should consult a disability attorney for the best chance of success - Disabled World (DW).
Introduction
Cigna May Have to Pay Wrongfully Denied Disability Benefits
Following a 30 month investigation, Cigna Insurance Company has entered into a regulatory settlement agreement on May 13, 2013 and agreed to re-evaluate thousands long term disability claims that were previously denied.
Main Content
Cigna Insurance Company, one of the top five largest group disability insurance companies, finally got caught by the Department of Insurance investigators from the states of California, Maine, Massachusetts, Connecticut, and Pennsylvania.
An extensive investigation regarding the long term disability claims handling practices of Cigna Insurance company began in September 2009 and was concluded with the signing of a Regulatory Settlement Agreement ("Cigna Agreement") on May 13, 2013.
The Cigna Agreement requires Cigna to pay fines totaling $1.675 million dollars and re-evaluate hundreds of long term disability claims that were denied between 2009 and 2010, plus all denied Cigna claims for California residents between 2008 through 2010.
Cigna is also required to abide by new claims handling procedures which require Cigna to give greater weight to Social Security Disability Benefit Approval Findings and take every reasonable step to verify a claimant's disabling condition.
Cigna is also required to use independent doctors to evaluate claims and they cannot bonus any employees based upon the number of claims denied.
Cigna will be subject to constant monitoring by the states investigators and must meet with investigators quarterly to report on the number of previously denied claims that have been reversed and the implementation of the new claim handling procedures.
Cigna has set aside $77 million to pay for potential claims that were wrongfully denied, according to the Commissioner for the California Department of Insurance.
Disability Attorney Gregory Michael Dell stated:
"Cigna will be forced to re-evaluate potentially thousands of claims and our disability insurance lawyers want to make sure that Cigna claimants are prepared so that they can avoid another claim denial. We are offering a free immediate phone consultation to discuss a claimant's rights under the Cigna Reassessment Agreement."
Cigna Will Continue To Apply High Scrutiny To Previously Denied Long Term Disability Claims
Cigna has denied any wrongdoing in the Settlement Agreement, therefore claimants should not automatically assume that their claims for reassessment will be approved. Cigna will continue to challenge long term disability claims and claimants must present very supportive medical evidence in order to be approved. Hopefully, claimants will see a lot less disability claim denials as a result of the monthly monitoring of the Cigna long term disability procedures. This Agreement is a good thing for Cigna Policy holder.
If you receive a letter from Cigna, you must notify Cigna within 60 days of the date of the letter of your request for reassessment. A claimant should then contact a disability insurance attorney to discuss what needs to be done in order get long term disability benefits reinstated. After 24 months, Cigna will be re-examined by the five states in order to determine if Cigna has complied. If Cigna fails to comply they could be subject to millions of dollars in additional fines.