Massachusetts Announces $430K Settlement With AIG Subsidiary

The Insurance Company of the State of Pennsylvania (ICSOP), a subsidiary of the American International Group (AIG), has agreed to pay $430,000 to settle allegations that it sold unauthorized health insurance to Massachusetts consumers and failed to cover mandated benefits required by state law, Massachusetts Attorney General Maura Healey announced on Sept. 15.

According to the complaint, filed along with the consent judgment in Suffolk Superior Court in Boston, ICSOP is alleged to have sold health insurance policies to Massachusetts consumers that were not authorized for sale.

The complaint also alleges ICSOP 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.

Under the terms of the consent judgment, approved by the Court, ICSOP must pay $430,000, including $355,000 for consumer relief and $75,000 to the Commonwealth of Massachusetts, composed of $60,000 for the Local Consumer Aid Fund and $15,000 for the costs of the investigation.

“Consumers purchasing health insurance should be confident that their policies comply with state law,” Healey said. “Companies that sell unauthorized health insurance or fail to cover essential benefits mandated by law, such as behavioral and women’s health services, must be held accountable to consumers.” She advised consumers who are concerned about illegal health insurance practices in Massachusetts to call the Attorney General’s health care helpline.

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