MEGA Life Fined $1M in Maine for Flawed Premium Method
MEGA Life and Health Insurance, a subsidiary of HealthMarkets, has agreed to pay a $1 million fine imposed by the Maine Bureau of Insurance and the Maine Attorney General to settle a lawsuit that alleged the insurer used a flawed method to determine premiums for individual health insurance policies, the Portland Press Herald reports. The fine, one of the largest ever agreed to in Maine, represents a civil penalty of $250,000 for each of the four years the company operated in Maine. The insurer from 2004 to 2007 issued approximately 9,830 policies in the state. MEGA Life also will be required to refund consumers $4.6 million in overpaid premiums, plus interest. According to Maine Attorney General Stephen Rowe (D), MEGA Life's rates were excessive under Maine law. Rowe said the company should have revised premium rates after its loss ratios did not meet the required statutory minimums.The insurer has 30 days from the date of the decision to notify the Insurance Bureau of how they will compensate policyholders. According to MEGA Life, the agreement was reached after cooperative discussions with state regulators. Within 30 days, the company plans to file new rates with the bureau for its review and submit customer and refund data. Refunds will begin to be mailed within the next 60 days according to MEGA Life. Since 2002, MEGA Life has been fined by eight states and has faced lawsuits from dozens of policyholders, according to the Press Herald (Bell, Portland Press Herald, 4/4). This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
