New York’s Attorney General and the New York Department of Financial Services on Tuesday said they have reached a settlement with Richmond, Va.-based Markel Insurance Co. over charges the insurer systemically overcharged college students on their health care plans.
Under terms of the agreement, Markel has agreed to pay more than $2.75 million in refunds to students and colleges and a combined penalty of $990,000 to the New York attorney general’s office and the DFS.
In a joint statement, the officials said that a joint investigation revealed that Markel’s student health insurance plans, college accident insurance plans and sports accident insurance plans failed to meet the state’s minimum loss ratio of 65% for the policy years 2007-08, 2009-10 and 2011-12. The state said the premiums collected during those periods led to nearly $3 million in overcharges to roughly 22,000 students.
“This settlement sends a clear message: Insurance companies, like everyone else, must play by the rules and work together with government to bring down the cost of health care,” New York Attorney General Eric T. Schneiderman said in the statement.
New York said the investigation revealed that Markel also entered into a compensation agreement with one broker that would only pay the broker a bonus if the plan’s loss ratio was kept below 60%.
“Running up the health insurance bills of students and parents trying to make ends meet is objectionable and simply will not be tolerated,” New York Superintendent of Financial Services Benjamin M. Lawsky said in the statement.
Article source: http://businessinsurance.com/article/20131203/NEWS07/131209951