I deal with life insurance, so a story like this is extremely depressing. We expect better from corporate America, and are sometimes (often?) disappointed. Bottom line: it’s essential to keep up with the news in order to know who is worthy of trust.
The company in this instance is Gerber Life Insurance — yes the same name as the baby food manufacturer, but a different company.
A recent examination of the company’s operations in North Carolina resulted in massive fines. The NC insurance commissioners office found a number of improper activities associated with accidental death and dismemberment policies issued by the company. (Disclosure: these are policies I usually recommend that consumers not buy, as I view them as a waste of money in most cases. There are better ways to use scarce dollars.)
Investigators found that Gerber
- Was taking an average of 208 days to process claims
- Was delaying processing by requesting unnecessarily and irrelevant documentation (tax returns??)
- Caused some parents to have to file law suits to collect claims to which they were entitled, reducing their benefit by the cost of their lawyer fees
- Used a third party not approved by North Carolina to process claims
As a result of this investigation, Gerber was required to pay $2,533,665 to policy holders, and $1,102,000 in fines to North Carolina.
I wonder how many other states need to open investigations.
I cannot imagine putting families through this much grief after the loss of a child. Who could do that?
Needless to say, I have no intention of writing any insurance with Gerber.