Mass. AG Announces $209K Settlement With American Fidelity Assurance

December 4, 2015

American Fidelity Assurance Company (AFA), a life and health insurance company based in Oklahoma City, has agreed to pay $209,000 to settle allegations that it failed to cover mandated benefits required by state law and sold unauthorized health insurance to Massachusetts consumers, Massachusetts Attorney General Maura Healey announced.

“Massachusetts residents should be confident that their health insurance policies comply with state law,” Healey said Thursday. “We will continue to hold accountable companies that engage in illegal insurance practices and fail to provide important health care services for families who need them.”

According to the complaint, filed along with the consent judgment in Suffolk Superior Court in Boston Thursday, AFA violated the state’s consumer protection laws by excluding coverage of certain health services required by Massachusetts law, including behavioral health, “pap” test screening, mammography, contraception and preventive care for newborns and children up to age six.

The complaint also alleges AFA issued health insurance in Massachusetts that was not authorized to be issued because it was not filed first with the state’s Division of Insurance.

Under the terms of the approved consent judgment, AFA must pay $209,000, including $134,000 in consumer relief and $75,000 to the Commonwealth of Massachusetts, which includes $60,000 for the Local Consumer Aid Fund.

In September, the attorney general’s office reached a settlement with the Insurance Company of the State of Pennsylvania (ICSOP), a subsidiary of AIG, in which the company agreed to pay $430,000 to settle allegations that it also failed to cover mandated benefits required by state law and sold unauthorized health insurance to Massachusetts consumers.

The attorney general’s office recommends that Massachusetts consumers who are concerned about illegal health insurance practices in the state call the attorney general’s health care helpline at (888) 830-6277. Guidance on how to choose a health plan is also available on the attorney general’s website.

Source: The Massachusetts Attorney General’s Office

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