New York, NY – A significant victory for consumers in New York State has been announced by Superintendent of Financial Services Adrienne A. Harris. Following an investigation into John Hancock Life & Health Insurance Company, the financial institution will be compelled to return a staggering $21.6 million to affected consumers and their beneficiaries. In addition to this, John Hancock is mandated to repay $2.2 million to the New York State Medicaid Program and face a penalty of $2.5 million for breaches of New York Insurance Law related to long term care insurance policies.
The investigation, spearheaded by the New York Department of Financial Services (DFS), revealed critical compliance failures by John Hancock in its administration of long term care insurance. These policies are designed to provide crucial financial support for aging New Yorkers who require long-term care services, expenses often not covered by standard health insurance.
“As New Yorkers age, the need for long term care services becomes a pressing concern for many, often involving substantial costs not covered by typical insurance plans. It is paramount that insurance providers in this sector adhere strictly to the law, ensuring New Yorkers receive the care and benefits they are entitled to,” stated Superintendent Harris. She further emphasized, “DFS remains committed to collaborating closely with the New York State Medicaid Program to safeguard the financial well-being of consumers and to guarantee that all long term care insurance products are managed in full accordance with New York statutes and regulations.”
Echoing this sentiment, NYS Medicaid Director Amir Bassiri remarked, “The New York State Medicaid Program is dedicated to protecting our most vulnerable citizens while diligently preserving state taxpayer funds. We commend the Division of Financial Services for their successful investigation and for securing $21.6 million for New Yorkers who were unjustly deprived of their long term care insurance benefits.”
The investigation was initiated following a consumer complaint received by DFS through the Partnership Office at the New York State Department of Health (DOH). The complaint highlighted deficiencies in John Hancock’s responsiveness and resolution regarding the improper early termination of a complainant’s long term care policy. Partnership Long Term Care policies are jointly overseen by DFS and DOH.
The ensuing joint investigation by DFS and DOH uncovered that John Hancock had prematurely terminated 156 New York State Partnership Long Term Care policies. This occurred before policyholders had exhausted their entitled benefits and involved miscalculations of lifetime maximum benefits for those who utilized less than their maximum daily benefits. These wrongful terminations transpired between February 2001 and July 2019, resulting in a loss of 27,161 days of benefits for policyholders. Consequently, affected insured individuals, whether already claiming benefits or needing to claim after termination, may have been forced to pay for long-term care expenses out-of-pocket or prematurely rely on Medicaid, instead of utilizing their rightfully purchased John Hancock long term care insurance. John Hancock is committed to fully remediating all impacted New York Partnership policyholders.
As part of the settlement agreement with DFS, John Hancock has acknowledged the DFS findings and officially signed a Consent Order, formalizing their commitment to rectify these issues and prevent future occurrences.
A detailed copy of the John Hancock Life and Health consent order is publicly accessible on the DFS website, providing further transparency into this significant resolution concerning John Hancock Long Term Health Care insurance practices.
