Life insurer Cigna has been told to pay a $3.5 million penalty for misleading people about its policies.
The Financial Markets Authority (FMA) said the Wellington High Court handed down a $3.575m fine to Cigna for making “false and/or misleading representations” about inflation benefits in some life insurance policies.
From early 2013 until early 2019, Cigna increased customer premiums and cover under indexation benefits on various policies.
When doing so, it used rates that greatly exceeded the Consumers Price Index and were not in line with fixed rates contained in customers’ policies, as was required under the relevant policies.
“The $3.5 million penalty against Cigna is the largest the FMA has secured in an enforcement case, which reflects the level of harm caused by this issue,” the authority’s head of enforcement Margot Gatland said today.
“Cigna’s conduct affected many of its customers, who trusted the firm to be transparent and look after their interests.
“This judgment sends a strong message to the industry that firms need to give due regard to customers’ interests, including when making pricing changes and communicating them.”
The case relates to Cigna’s communication of, and charging for, inflation benefits or “indexation” to customers holding 52,363 policies between April 2014 and early 2019.
“The company communicated these changes to customers on an opt out basis, through annual policy notification letters.” the FMA said.
“Indexation is commonly offered on...
Dish Wireless LLC agreed to pay roughly $17 million to resolve allegations that it violated the False Claims Act, common law, and the Communications Act of 1934 relating to claims submitted to Fed...