COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, SS. SUPERIOR COURT DEPARTMENT
OF THE TRIAL COURT
) COMMONWEALTH OF MASSACHUSETTS, )
Plaintiff, ) CIVIL ACTION NO. /3 -
6)
7W--1-1-2--
TRANSAMERICA LIFE INSURANCE )
COMPANY, )
)
Defendant. )
)
FINAL JUDGMENT BY CONSENT
The Court has reviewed the Complaint filed in this case by the Commonwealth of Massachusetts (the "Commonwealth"), the assented-to Motion for Entry of Final Judgment by Consent and the attached Consent. The Court finds that it properly has subject matter
jurisdiction of this Complaint and personal jurisdiction over the defendant, Transamerica Life Insurance Company ("Transamerica"), and finds that the entry of this Final Judgment by Consent ("Consent Judgment") is in the interest of justice.
WHEREAS, without admission of liability, in order to amicably resolve their differences concerning the Complaint and in order to avoid the cost and uncertainty of litigation, the parties have agreed to the entry of this Consent Judgment;
WHEREAS, the Attorney General of the Commonwealth (the "Attorney General") has concluded an investigation into the practices of Transamerica regarding the marketing, sale,
issuance and administration of health insurance policies and certificates issued or delivered to Massachusetts residents;
WHEREAS, the Attorney General's investigation pertained to allegations that Transamerica engaged in unfair and deceptive acts and practices that harmed Massachusetts consumers by: (1) unfairly or deceptively marketing health insurance plans, (2) offering and issuing health insurance plans to individuals and small groups in violation of M.G.L. c. 176J, and (3) failing to cover, and denying claims for, health benefits and services for Massachusetts residents in violation of statutory mandates; and
WHEREAS, the Commonwealth has filed an assented-to motion seeking entry of this Consent Judgment;
Accordingly, good cause being shown, IT IS ORDERED THAT: 1. Transamerica is permanently enjoined from:
(a) engaging in unfair or deceptive acts or practices in marketing (through groups, associations or otherwise) health insurance policies or certificates of group health insurance coverage through any marketing material presented, distributed or disseminated in Massachusetts in violation of M.G.L. Chapter 93A, § 2 (including, without limitation, any marketing material originating outside Massachusetts concerning a product that is not available in Massachusetts, pursuant to applicable Massachusetts law, which may reasonably be expected to be seen or heard in this Commonwealth unless it prominently sets forth a disclaimer that the advertised product is not available to residents of the Commonwealth);
Bulletin 2010-7, as it may be hereafter amended, or by any such other formal guidance
concerning requirements of disclosure of not constituting creditable coverage within the meaning
of M.G.L. c. 111M, § 1 as may subsequently be issued by the Massachusetts Division of
Insurance, unless all marketing materials and communications relating to such policy or
certificate which are made to or made accessible to persons residing in Massachusetts clearly and
conspicuously disclose that the policy or certificate does not constitute minimum creditable
coverage within the meaning of M.G.L. c. 111M, § 1 and, thus, does not enable the
Massachusetts resident to satisfy the requirement of M.G.L. c. 111M, § 2, to have health
insurance that does meet that standard as well as any disclosure required by Massachusetts
Division of Insurance Bulletin 2010-7, as it may be hereafter amended, or by any such other
formal guidance concerning requirements of disclosure of not constituting creditable coverage
within the meaning of M.G.L. c. 111M, § 1 as may subsequently be issued by the Massachusetts
Division of Insurance;
(c) engaging in unfair or deceptive acts or practices in offering or issuing health
insurance policies or certificates or riders of group health insurance coverage directly to any
person residing in Massachusetts, or through any group or association, unless such policy,
certificate or rider complies with the statutory requirements of M.G.L. Chapters 175 §§ 47B,
47C, 47D, 47F, 47G, 47H, 47U, 47AA and § 110, 176J § 5, and 176N §§ 2, 3 as those chapters
may be hereafter amended; and
(d) marketing, offering, issuing, or administering, including without
limitation, through any group or association, any health insurance policy or certificate or rider of
group insurance coverage with respect to any person residing in Massachusetts unless such
to any person residing in Massachusetts, with the statutory requirements of M.G.L. Chapters 175
§§ 47B, 47C, 47D, 47F, 47G, 47H, 47U, 47AA and 110, 176J § 5, and 176N §§ 2, 3, as those
chapters may be hereafter amended.
2. Within ten (10) calendar days after the entry of this Consent Judgment,
Transamerica shall make the following separate payments to the Office of the Attorney General
totaling $580,000 (five hundred eighty thousand dollars) to be made by electronic fund transfer
to the Office of the Massachusetts Attorney General to an account or accounts identified by the
Commonwealth:
a. $250,000 for civil penalties
b. $300,000 for the Local Consumer Aid Fund, as established by M.G.L. c.
12, § 11G and
c. $30,000 for the costs of the investigation.
3. Within ninety (90) calendar days after the entry of this Consent Judgment,
Transamerica shall review any fully insured health insurance policies that are in effect at such
time, under which certificates or other evidences of coverage (such as an extraterritorial rider)
(the "Certificates") have been issued or delivered by Transamerica to any Massachusetts resident
insured under a group or individual insurance policy issued by Transamerica within or outside of
Massachusetts (an "Insured") to ensure that such Certificates, to the extent that they do not
already do so, comply with M.G.L. c. 175 §§ 47B, 47C, 47D, 47F, 47G, 47H, 47U, 47AA and
110, 176J, and 176N §§ 2, 3. Each Certificate shall be sufficiently amended or otherwise
corrected as necessary so that it does not include any provisions that violate M.G.L. c. 175 §§
47B, 47C, 47D, 47F, 47G, 47H, 47U, 47AA and 110, 176J § 5, and 176N §§ 2, 3 or shall be
underlying that Certificate. Within ninety (90) calendar days after the entry of this Consent Judgment, Transamerica shall have given any and all required notices of termination as to any Certificates that it chooses to terminate in accordance with this paragraph. Within ninety (90) calendar days after the entry of this Consent Judgment, Transamerica shall have submitted to the Massachusetts Division of Insurance ("DOI") any Certificates and policies to be filed and/or amended to address these issues in accordance with this paragraph. Within (i) sixty (60)
calendar days after receiving approval of the amended policies or Certificates by the DOI, if such approval is required by law, or (ii) within ninety (90) days after submitting the policies or
certificates if approval of the amended policies or Certificates by the DOI is not required by law, Transamerica shall send copies of the applicable amended Certificate by first-class mail to each then current Insured whose Certificate is affected by this paragraph and shall send an exemplar copy of each form of amended policy and/or Certificate to the Attorney General. Within ninety (90) calendar days after the entry of this Consent Judgment, Transamerica shall submit to the Office of the Attorney General a report signed by a corporate officer attesting that it has performed a reasonably diligent review of its policies as called for in this paragraph and has submitted to the DOI amendments of any policies or Certificates as called for by this paragraph, or that no such policies exist.
4. Within ninety (90) calendar days after the entry of this Consent Judgment,
payment shall be sent by first-class mail to each affected Insured along with a letter, in a form
attached hereto as Exhibit A.
5. Within one hundred twenty (120) calendar days after the entry of this Consent
Judgment, Transamerica shall have reviewed the claims made under the policies underlying the
Certificates for dates of service from September 1, 2007 through the date of entry of this Consent
Judgment, shall have paid, to the extent it has not already done so, the full amount of any
benefits required by M.G.L. c. 175 §§ 47B, 47C, 47D, 47F, 47G, 47H, 47U, 47AA and 110, 176J
§ 5, and 176N §§ 2, 3 plus adding 5% simple interest calculated from the date on which such
benefits were payable and shall have sent by first-class mail to any Insured whose claim was
reprocessed as described in this sentence an explanation of benefits and a letter, in a form
attached hereto as Exhibit B. Within one hundred twenty (120) calendar days after the entry of
this Consent Judgment, Transamerica shall submit to the Office of the Attorney General a report
signed by a corporate officer attesting that it has (i) performed a reasonably diligent review of
claims described in this paragraph, and (ii) reprocessed any such claim that was not properly paid
pursuant to M.G.L. c. 175 §§ 47B, 47C, 47D, 47F, 47G, 47H, 47U, 47AA and 110, 176J § 5, and
176N §§ 2, 3.
6. Within one hundred twenty (120) calendar days after the entry of this Consent
Judgment, Transamerica shall pay each Insured who was insured under a policy issued by
Transamerica that was subject to M.G.L. c. 176J but was not approved by the DOI and with
respect to whom (and/or to whose dependent(s)) a claim was filed, any amount paid by any such
Insured for coverage under any such policy adding 5% simple interest from the date of such
limited to those paid pursuant to paragraph 5 hereof). Each such payment shall be sent by
first-class mail to each affected Insured along with a letter, in a form attached hereto as Exhibit A.
7. One (1) year after entry of this Consent Judgment, Transamerica shall submit to
the Office of the Attorney General a signed report attesting to the total dollar amount of all
checks issued in accordance with paragraphs 4-6 of this Consent Judgment and, of that amount,
the total dollar amount of all checks that were cashed or deposited. Along with such report,
Transamerica shall pay to the Office of the Attorney General any amount by which $750,000
exceeds the amount of all checks issued by Transamerica in accordance with paragraphs 4-6.
Checks issued in accordance with those paragraphs that remained uncashed for the applicable
length of time under M.G.L. c. 200A shall be considered to be abandoned "property" as defined
in M.G.L. c. 200A, § 1. Uncashed checks shall be honored by Transamerica until such time as
the value of same is surrendered to the state treasurer, pursuant to M.G.L. c. 200A, § 8A.
Pending such surrender, Transamerica shall comply with all provisions of M.G.L. c. 200A
regarding the treatment of unclaimed property, including but not limited to providing the
treasurer with all reports required by M.G.L. c. 200A. Transamerica shall, upon request, provide
copies of all such reports to the Office of the Attorney General. Nothing in this paragraph limits
Transamerica's obligations under paragraphs 4-6 to $750,000. Any payment to the Office of the
Attorney General under this paragraph shall be made by check payable to the Commonwealth of
Massachusetts, delivered to Emiliano Mazlen, Assistant Attorney General, Office of the Attorney
General, Health Care Division, One Ashburton Place, Boston, Massachusetts 02108, and any
such payment shall be directed to the Commonwealth's General Fund.
8. Within forty-five (45) calendar days of Transamerica receiving any mailing,
by paragraphs 4-7 hereof ("Mailing"), returned by the U.S. Postal Service because the mailing
address was incorrect, Transamerica shall make reasonable efforts to resend such Mailing, which
shall include resending any Mailing to any forwarding address provided by the U.S. Postal
Service or provided by an address research firm, which may be an on-line service, retained by
Transamerica to obtain an updated address for any person whose Mailing is returned by the U.S.
Postal Service without a forwarding address.
9. Nothing in this Consent Judgment shall require the Commonwealth, the Office of
the Attorney General or an individual that receives a payment from Transamerica pursuant to any
of paragraphs 4-6 to pay any amount to Transamerica.
10. Transamerica shall comply with all reasonable inquiries and requests from the
Office of the Attorney General regarding the implementation of the terms contained within this
Consent Judgment.
11. In accordance with the attached Consent, Transamerica has waived all rights of
appeal. Transamerica has also waived the requirements of Rule 52 of the Massachusetts Rules of
Civil Procedure with respect to the entry of this Consent Judgment.
12. This Consent Judgment resolves only the allegations and claims raised in the
Complaint filed against Transamerica, and does not resolve and shall not be deemed a waiver of
any other actual or potential claims the Commonwealth may have against Transamerica or that
Transamerica may have against any person other than the Commonwealth. It does not resolve
any claims by any party other than the Commonwealth, provided that nothing in this Consent
Judgment shall confer a private right of action as to any other party. This Consent Judgment
similarly does not resolve any actual or potential claims by the Commonwealth against any other
13. This Consent Judgment represents the entire agreement between the
Commonwealth and Transamerica concerning the matters addressed herein. It supersedes any
prior agreement, understandings or stipulations between the parties regarding the subject matter
hereof and may not be modified except by further order of the Court obtained after reasonable
notice to all parties has been provided.
14. Except for purposes of enforcement of this Final Judgment by the Commonwealth or by Court order, no part of the Complaint or this Final Judgment shall be admitted into
evidence against Transamerica or any of its parent corporations, subsidiaries, affiliates, officers,
directors, employees, predecessors, successors, insurers, reinsurers and assigns. No allegation or
assertion of liability or wrongdoing on the part of Transamerica, set forth in either the
Complaint or the Final Judgment, shall be treated or construed as an admission of liability or
wrongdoing by Transamerica or any of its parent corporations, subsidiaries, affiliates, officers,
directors, employees, predecessors, successors, insurers, reinsurers or assigns.
15. Any violation of this Final Judgment by Consent may be punishable by civil or
criminal contempt proceedings, or as otherwise provided by law.
16. The Attorney General agrees that, prior to taking any action against Transamerica
to enforce this Consent Judgment, the Office of the Attorney General shall provide Transamerica
written notice of any suspected violations of this Consent Judgment and a twenty (20) calendar
day period to address any such violations, within which period the parties shall make good faith
efforts to meet and confer regarding the suspected violations. Any efforts by Transamerica
during the twenty (20) calendar day period to address any such violations shall not bar or limit
the public interest. Nothing in this section shall affect or apply to any action that might be
brought by the Attorney General except actions to enforce this Consent Judgment.
17. Any notices or communications required to be transmitted between Transamerica
and the Commonwealth pursuant to this Consent Judgment shall be provided in writing by
first-class mail, postage prepaid, and by electronic mail to the parties or successors as follows, unless
otherwise agreed in writing.
To the Commonwealth of Massachusetts To Transamerica
Emiliano Mazlen, Esq. Assistant Attorney General Office of the Attorney General One Ashburton Place
Boston, MA 02108
Steven D. Weinberg, Esq. Business Unit General Counsel
Transamerica Life Insurance Company 1400 Centerview Drive
Little Rock, Arkansas 72211-4350 [email protected]
18. The Superior Court shall retain juisdiction of this case.
SO ORDERED, this
ev
day of , 2013.CONSENT OF TRANSAMERICA LIFE INSURANCE COMPANY
Transamerica Life Insurance Company ("Transamerica"), through its officer and attorney
signing below, admits to the continuing jurisdiction of the Superior Court over the persons and
subject matter of this action, and consents to the entry of the Final Judgment by Consent
regarding the claims between the Commonwealth and Transamerica without trial or adjudication
of any issue of fact or law. In so consenting, the officer and attorney of Transamerica signing
below certify that they have personally read and understand the Judgment, and represent that
they are authorized to enter into this settlement on behalf of Transamerica.
Transamerica waives the entry of findings of fact and conclusions of law pursuant to Rule
52 of the Massachusetts Rules of Civil Procedure with respect to the claims between the
Commonwealth and Transamerica. The officer and attorney signing below on behalf of
Transamerica understand that any violation of this judgment may result in civil or criminal
contempt proceedings, penalties pursuant to M.G.L. c. 93A and any additional penalties and
sanctions as are provided by law.
Neither this consent nor any part thereof shall be treated or construed as an admission of
liability or wrongdoing, or admitted into evidence or used for any other purpose except in a
proceeding to enforce the terms of this Consent Judgment.
Assented to, waiving all rights of appeal:
By:
Connie H. Whitlock
Senior Vice President — Operations Transamerica Life Insurance Company 1400 Centerview Drive
Little Rock, Arkansas 72211-4350
And s attorney
("\
eter S. Rice, Esq. DLA Piper LLP
33 Arch Street, 26 th Floor
Boston, Massachusetts 02110-1447 BBO No. 418600
EXHIBIT A
[Letterhead of Transamerica Life Insurance Company]
[DATE] [INSURED'S NAME AND ADDRESS]
Re: Certificate # [INSERT CERTIFICATE #]
Dear [INSURED NAME]:
Under the terms of a consent judgment with the Office of Massachusetts Attorney General Martha Coakley, you are receiving the enclosed check to refund amounts you paid for coverage under an insurance policy issued by Transamerica Life Insurance Company. You are entitled to the enclosed check without any further action or obligation.
The amount of the enclosed refund check was calculated by taking the total amount you paid to obtain your insurance coverage plus 5% interest and subtracting the total amount we paid out on your health care claims (and those of your dependents, if any).
If you have any questions, please call [TRANSAMERICA INSERT TELEPHONE NUMBER].
Very truly yours,
EXHIBIT B
[Letterhead of Transamerica Life Insurance Company]
[DATE] [INSURED'S NAME AND ADDRESS]
Re: Certificate # [INSERT CERTIFICATE #]
Dear [INSURED NAME]:
Under the terms of a consent judgment with the Office of Massachusetts Attorney General Martha Coakley, you are receiving the enclosed check for additional amounts due to you in connection with your coverage under an insurance policy issued by Transamerica Life Insurance Company. You are entitled to the enclosed check without any further action or obligation.
The amount of the enclosed check represents your claims (and those of your dependents, if any) made under the Transamerica insurance policy that were reprocessed pursuant to the terms of the consent judgment, adding 5% interest.
If you have any questions, please call [INSERT TRANSAMERICA TELEPHONE NUMBER].
Very truly yours,
