Health insurer Life Insurance of North America (LINA) will pay over $1.7m to consumers and the Commonwealth, The Massachusetts Attorney General Martha Coakley has announced.
The insurer was accused to sell its cancer and surgical insurance through numerous offensive ways to over 1,000 Massachusetts veterans, including specifically targeting World War II veterans.
Dealing with the lawsuit against the underwriter, Suffolk Superior Court said that LINA despoiled the state's Consumer Protection Act through several deceptive practices in the marketing and administering of its supplemental health insurance products to Massachusetts veterans.
LINA has offered supplemental health insurance to Massachusetts residents, under two particular policies: a hospital indemnity policy offering outpatient surgical benefits and a cancer-only policy, since 2007.
As per the charge sheet, the insurer misrepresented its insurance as a governmental veteran's benefit, illegally denying coverage based upon preexisting conditions, making false claims about its rates, exaggerating benefits, misrepresenting coverage limits and deceptively billing Massachusetts residents.
Under the terms of the judgement, LINA will pay a minimum of $650,000 in consumer relief for Massachusetts residents and also an additional $1m to the Commonwealth as a deterrent, of which $500,000 is for civil penalties and $500,000 to promote initiatives to assist Massachusetts military veterans, seniors, or residents with mental health conditions, or to address unlawful marketing practices targeted at such individuals.
LINA will also pay the Commonwealth $55,000 for the costs of the investigation.
