For Immediate Release - December 03, 2015

Insurance Company to Pay More $200,000 Over Claims of Failing to Cover Mandated Benefits, Selling Unauthorized Health Insurance

BOSTON – American Fidelity Assurance Company (AFA) has agreed to pay $209,000 to settle allegations that it failed to cover mandated benefits required by state law and sold unauthorized health insurance to Massachusetts consumers, Attorney General Maura Healey announced today.

“Massachusetts residents should be confident that their health insurance policies comply with state law,” AG Healey said. “We will continue to hold accountable companies that engage in illegal insurance practices and fail to provide important health care services for families who need them.”

According to the complaint, filed along with the consent judgment in Suffolk Superior Court today, AFA violated the state’s consumer protection laws by excluding coverage of certain health services required by Massachusetts law, including behavioral health, “pap” test screening, mammography, contraception and preventive care for newborns and children up to age six.

The complaint also alleges AFA issued health insurance in Massachusetts that was not authorized to be issued because it was not filed first with the Division of Insurance.

Under the terms of the consent judgment, approved by the court today, AFA must pay $209,000, including $134,000 in consumer relief and $75,000 to the Commonwealth, which includes $60,000 for the Local Consumer Aid Fund. 

Consumers concerned about illegal health insurance practices in Massachusetts are urged to call the Attorney General’s Health Care Helpline at (888) 830-6277. Guidance on how to choose a health plan is also available on the Attorney General’s website

In September, the AG’s Office reached a settlement with the Insurance Company of the State of Pennsylvania (ICSOP), a subsidiary of AIG, in which they agreed to pay $430,000 to settle allegations that it also failed to cover mandated benefits required by state law and sold unauthorized health insurance to Massachusetts consumers.

This matter was handled by Assistant Attorney General Emiliano Mazlen of Attorney General Healey’s Health Care Division with assistance from Division Chief Karen Tseng.

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