The California Department of Insurance has filed an administrative enforcement action against a life insurer in connection with allegations of problems with the handling of long term care (LTC) insurance claims and other claims.
The California department says RiverSource Life Insurance Company, a unit of Ameriprise Financial Inc., Minneapolis (NYSE:AMP), reduced LTC policyholders' ability to collect on claims by making it difficult for policyholders to determine which LTC facilities RiverSource would pay for and requiring facilities to comply with strict, "antiquated policy language" to qualify to receive reimbursement.
The department also found problems with payments of disability income and life insurance claims, officials say.
Ameriprise notes in a statement that allegations stem from a period that ended more than 3 years ago.
"The allegations relate primarily to a closed legacy book of long term care business," Ameriprise says. "Claims on that book are administered by a third party. RiverSource strongly disagrees with the Department's allegations and conclusions. RiverSource is committed to fair claims handling practices and compliance with applicable laws and regulations in California and all states where it does business."
- Allison Bell