Montpelier, VT– Today, the Vermont Department of Financial Regulation (DFR) announced a $1.8 million settlement with Companion Life Insurance Company, of South Carolina, for selling unapproved and inadequate student health insurance policies to students at ten Vermont higher education institutions. The penalty component of the settlement is the largest ever ordered by the DFR against an insurance company.
At issue, Companion offered health insurance to over 2,500 Vermont students, but did not file its policies with the DFR for approval. Had the policies been filed, the DFR would not have approved them as they did not include important coverage mandated under Vermont law and the Affordable Care Act. Some of the missing coverages included certain preventive screenings and counseling (including for sexually transmitted diseases), contraceptive management, mental health and substance abuse treatment, and athletic injuries. As a result, several hundred claims were improperly denied, and 212 students will receive restitution for those claims. The DFR also found that Companion failed to accurately represent its policies in marketing materials, maintain appropriate records and procedures and supervise its business partners.