Class Action Lawsuit Claims CNA Rips off Elderly Policyholders

A 91-year-old plaintiff has filed a class action lawsuit against long-term care insurance provider CNA Financial Corp. and its subsidiary Continental Casualty Co., claiming that they illegally target elderly policyholders with massive rate hikes and limited long-term care options.

“Defendants have engaged in an illegal course of conduct designed to reduce its exposure to costly long-term care claims by denying claims of elderly insureds through a scheme of fraud, deception, and manipulation of policy terms, while seeking massive premium increases at the expense of these same insureds,” lead plaintiff Marie Gardner says in her class action lawsuit.

Gardner accuses the insurance giant of increasing its rates by as much as 30 percent at the same time it changed its policies to deny previously-covered stays in assisted living facilities. She estimates that close to 400 people in Connecticut and more than 20,000 people nationwide have been affected by these practices.

Gardner says she was paying into her long-term care insurance policy for 15 years when she broke her hip in 2008 and moved in to an assisted living facility. Her claim was approved and she received her monthly benefits until Feb. 11, 2011, when CNA terminated the benefits because her condition had improved. In April 2012, she fractured her sacrum when she fell down a flight of stairs. When she applied for benefits, CNA denied her claim. She says she was told that the assisted living facility would have to have a nurse on site 24 hours a day to be covered.

In her class action lawsuit, Gardner claims CNA and Continental changed her policy to cover only nursing homes, even though it had previously covered a wide range of care facilities. She says the companies are denying new claims for stays at assisted living facilities.

Gardner cites a previous class action settlement between CNA and the Connecticut Insurance Department that indicated a nurse needed to be on call 24 hours a day at an assisted living facility, but only needed to be on site five hours a day, seven days per week to be covered by the insurance policy. “[A]t the time the CNA reached an alleged ‘agreement’ with the Connecticut Insurance Department, CNA did not disclose to the Insurance Department that it had previously been covering stays at assisted living facilities under this policy,” the class action lawsuit says.

Gardner argues that CNA used the previous class action settlement as a way to get around liability. “CNA is attempting to create a regulatory loophole where none exists,” the class action lawsuit says.

By filing the class action lawsuit, Gardner seeks class certification and an injunction to prevent the insurer from excluding claims for stays in Connecticut assisted living facilities.

Gardner is represented by Sean Collins.

The CNA Insurance Class Action Lawsuit is Marie L. Gardner v. CNA Financial Corp. and Continental Casualty Co., Case No. 3:13-cv-01918, in the U.S. District Court for the District of Connecticut.

UPDATE: The Connecticut Continental Casualty Long Term Care Insurance Class Action Settlement is now open! Click here to file a claim.