Long-Term Care Insurer Bankers Life Sued for Elder Abuse in Oregon

A class action lawsuit has been filed in Oregon against Bankers Life and Casualty Co., charging that the long-term care insurer is guilty of elder abuse in denying and delaying payment of insurance claims.  The suit also alleges that the company has raised premiums without improving benefits.

As ElderLawAnswers has reported, the Chicago-based insurer has gained a reputation for not paying claims. In 2008, 40 states found Bankers Life's parent company Conseco, Inc. (now called CNO), committed a pattern of consumer harm in the long-term care insurance business. While not admitting any wrongdoing, the company agreed to pay $2.3 million in fines and $30 million for system improvements and restitution. A 2007 New York Times article described how Conseco and Bankers Life employees were prohibited from calling policyholders in order to make things so hard for policyholders that they would either give up or die.

In the Oregon suit, filed in U.S. District Court in Portland, a husband and wife and a mother and son are seeking to represent an estimated class of 9,000 Oregonians and their relatives who have allegedly gotten the runaround from Bankers Life, which has ranked worst among long-term care insurance providers every year from 2005 to 2011 in the Oregon Department of Consumer and Business Services’ consumer complaint index.

The lead plaintiff, 87-year-old Lorraine Bates, moved into an adult foster home in 2009 in but Bankers refused to pay her claim, saying the facility didn't meet its policy requirements. The Oregon Insurance Division said in 2011 that Bankers would pay the claim.

"At best, there's a culture of indifference and incompetence at Bankers Life," said Michael L. Williams of the firm of Williams Love O’Leary & Powers, which is bringing the class action. "But we suspect when we get to the bottom of this that they've always had an intentional plan to save millions of dollars of claims payments by denying and delaying routine claims."

In addition to elder abuse, the suit charges the company with breach of contract, breach of promises, fraud, negligence and intentional misconduct. Bankers Life refused to comment on the suit, according to The Oregonian.

For The Oregonian's coverage of the suit, click here.

For more about long-term care insurance, click here.