DFS Fines QBE Insurance $750,000 for Issuing Impermissible Insurance Covering Students Enrolled in Institutions of Higher Education
Press Release
March 15, 2018
Contact: Richard Loconte, 212-709-1691
DFS FINES QBE INSURANCE $750,000 FOR ISSUING IMPERMISSIBLE INSURANCE COVERING STUDENTS ENROLLED IN INSTITUTIONS OF HIGHER EDUCATION
Colleges and Universities Were Sold Accident-Only Insurance Policies That Were Not in Compliance with Affordable Care Act and New York Law
Financial Services Superintendent Maria T. Vullo today announced that the Department of Financial Services (DFS) has fined QBE Insurance Corp., an insurer that offers blanket accident-only coverage to groups in New York, $750,000 for violations of New York Insurance Law. An investigation by DFS found that QBE unlawfully issued accident-only policies to institutions of higher education in New York to cover their enrolled students. The company has already ceased such sales to colleges and universities.
“DFS will continue to vigorously enforce the insurance law and take action to protect all New Yorkers, including students attending college and other institutions of higher education, to ensure that they are receiving the insurance coverage they deserve in compliance with federal and state law,” said Superintendent Vullo. “DFS appreciates QBE’s cooperation in resolving this matter and taking remedial steps to correct these violations of law.”
The DFS investigation found that QBE unlawfully sold the accident-only coverage for the 2016-17 school year to 25 institutions of higher education, covering 99,937 students. The insurer also failed to issue certificates setting forth the essential features of the insurance coverage to each of the 99,937 students covered by the policies.
A statutory change in New York law in 2014 limits policies issued to institutions of higher education to hospital and medical expense insurance policies that are compliant with the Affordable Care Act (ACA) and meet other specified requirements; policies that provide limited scope dental or vision benefits; and policies that provide coverage only for intercollegiate sports injuries. DFS also found that the company’s blanket accident-only insurance policy forms had not been updated to comply with changes to New York Insurance Law unrelated to the ACA. These non-compliant forms were also issued to permissible blanket groups other than institutions of higher education.
QBE is headquartered in Pennsylvania and licensed as a property and casualty insurance company in New York.
A copy of the consent order can be found here.
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