DCBS Media Release
July 27, 2000
State fines insurer $20,000 for unfair claims practices
(Salem) – The Department of Consumer and Business Services (DCBS) has fined a Minnesota insurance company $20,000 for several violations of Oregon laws and administrative rules.
The fine was assessed against Fortis Benefits Insurance Co. for its handling of separate claims for long-term disability (LTD) insurance benefits by two Salem residents.
An investigation by the DCBS Insurance Division found that Fortis Benefits failed to advise a Salem man if his LTD claim was accepted or denied within 30 days as required by the division's administrative rules. The company also failed to act promptly on two communications relating to the claim, thus delaying payment of benefits.
In addition, Fortis Benefits denied a Salem woman's LTD claim four times without conducting a reasonable investigation as required by Oregon law. The company initially denied the woman's claim in November 1996. After rejecting the claim three more times, Fortis Benefits reversed its decision in January 1999 and paid partial benefits of $2,400 in January 1999. However, the final payment of $22,500.25 was not made until August 1999.