state insurance
Cigna Corp. (CI) Chairman and Chief Executive H. Edward Hanway said Thursday the company will work to clear up questions raised by Sen. John D. Rockefeller IV (D, W. Va.), who this week said the company failed to accurately disclose some $5 billion of health insurance it sold in the commercial group market last year.
Rockefeller, chairman of the U.S. Senate Commerce, Science and Transportation Committee, sent a letter to Hanway on Monday questioning the way Cigna uses its members' health plan premiums and saying his panel found "serious inconsistencies" in the way the company discloses business information to the public and regulators.
"We are working very closely with him, we have furnished significant information to him and will be working though the questions he and his staff have" about inconsistencies between statutory filings, Hanway said during Cigna's third-quarter conference call. Cigna aims to clear up any confusion with the senator's committee, he said.
The small-group market that Rockefeller partly addressed in his letter "never has been a focus" for Cigna and comprises a small fraction of its membership, Hanway said.
Cigna, in regulatory filings, appeared to inaccurately account for a chunk of its business, failing to report its financial information in a manner consistent with five other major managed-care companies, Rockefeller said.
Rockefeller told Hanway that records show Cigna sold $5 billion in small- and large-group policies last year and failed to report it to state regulators, instead classifying the business in a catch-all "other group" category.
"This reporting does not appear to accurately reflect your company's operations in these two market segments, and it directly contradicts statements you made to the committee in a recent letter about your small business market," the senator wrote.
"This failure to provide accurate business information not only shows that your company is failing to comply with the requirements of state insurance law; it also undermines the efforts of regulators and policy makers to protect consumers from unfair insurance industry practices," Rockefeller said, noting state laws requiring insurers to disclose certain information. "Your company appears to have flouted these requirements and made it more difficult for regulators and consumers to hold you accountable for your conduct."
Rockefeller's letter came during the national health-reform debate and was part of a broader criticism by the senator that the nation's six largest health insurers are spending far less of every premium dollar on medical care than the 87 cents that an industry trade group estimates. The industry, he said, is withholding market segment-specific data on medical loss ratios--the percentage of premium revenue used for medical care--that could help consumers and small businesses make informed choices.
Rockefeller singled out Cigna and asked the company to produce accurate data by Nov. 9 showing its medical loss ratios for the last 10 years in the individual, small-group and large-group health insurance markets. He also asked how the company plans to amend its state insurance filings to accurately reflect its business activities.
Cigna Corp. (CI) Chairman and Chief Executive H. Edward Hanway said Thursday the company will work to clear up questions raised by Sen. John D. Rockefeller IV (D, W. Va.), who this week said the company failed to accurately disclose some $5 billion of health insurance it sold in the commercial group market last year.
Rockefeller, chairman of the U.S. Senate Commerce, Science and Transportation Committee, sent a letter to Hanway on Monday questioning the way Cigna uses its members' health plan premiums and saying his panel found "serious inconsistencies" in the way the company discloses business information to the public and regulators.
"We are working very closely with him, we have furnished significant information to him and will be working though the questions he and his staff have" about inconsistencies between statutory filings, Hanway said during Cigna's third-quarter conference call. Cigna aims to clear up any confusion with the senator's committee, he said.
The small-group market that Rockefeller partly addressed in his letter "never has been a focus" for Cigna and comprises a small fraction of its membership, Hanway said.
Cigna, in regulatory filings, appeared to inaccurately account for a chunk of its business, failing to report its financial information in a manner consistent with five other major managed-care companies, Rockefeller said.
Rockefeller told Hanway that records show Cigna sold $5 billion in small- and large-group policies last year and failed to report it to state regulators, instead classifying the business in a catch-all "other group" category.
"This reporting does not appear to accurately reflect your company's operations in these two market segments, and it directly contradicts statements you made to the committee in a recent letter about your small business market," the senator wrote.
"This failure to provide accurate business information not only shows that your company is failing to comply with the requirements of state insurance law; it also undermines the efforts of regulators and policy makers to protect consumers from unfair insurance industry practices," Rockefeller said, noting state laws requiring insurers to disclose certain information. "Your company appears to have flouted these requirements and made it more difficult for regulators and consumers to hold you accountable for your conduct."
Rockefeller's letter came during the national health-reform debate and was part of a broader criticism by the senator that the nation's six largest health insurers are spending far less of every premium dollar on medical care than the 87 cents that an industry trade group estimates. The industry, he said, is withholding market segment-specific data on medical loss ratios--the percentage of premium revenue used for medical care--that could help consumers and small businesses make informed choices.
Rockefeller singled out Cigna and asked the company to produce accurate data by Nov. 9 showing its medical loss ratios for the last 10 years in the individual, small-group and large-group health insurance markets. He also asked how the company plans to amend its state insurance filings to accurately reflect its business activities.
