A Liverpool-based life insurance company is under fire for unfair claims settlement practices that cost the beneficiaries of more than 439 deceased policyholders about $7.3 million.
The Globe Life Insurance Company of New York, which is based at 1020 Seventh North St., entered an agreement today with the stateâ€™s Department of Financial Services. Globe Life is a subsidiary of Torchmark Corporation.
Globe Life will pay a $439,000 fine, on top of the more than $7.3 million in restitution it has agreed to pay beneficiaries.
State officials said the company marketed its life insurance policies to low- and middle-income New Yorkers to pay for funeral, burial and other end-of-life expenses. Globe Life then improperly denied benefits to the beneficiaries of the policyholders.
Officials said 10 of the claims at issue were made by people in Onondaga County. The other 400-plus claims came from across New York state, according to the Department of Financial Services.
According to state officials, during the claims adjudication process, Globe Life routinely misrepresented facts, closed claims without the proper procedures and failed to inform beneficiaries in writing of the reasons for the denials.
State officials said Globe Life would also initiate investigations into claims and ask for medical records in cases in which it had no basis to suspect a policyholder had made a misrepresentation. When medical records were not produced, the company would notify beneficiaries their claims would not be paid and close the case. Or, if medical records were produced, Globe Life would improperly conclude the deceased had made a â€śmaterial misrepresentationâ€ť and deny claims.
The company used these improper practices from 2006 to 2016, state officials said.
As part of the agreement with the state, Globe Life will work with an independent administrator who will oversee the restitution process. The administrator will identify and locate beneficiaries who were improperly denied by Globe Life. The administrator will also set up a website, email address and phone number for affected consumers to contact. Globe Life will pay for the administratorâ€™s costs, state officials said.
More information will be posted to the Department of Financial Services website once the administrator has been selected.