Bankers Life insurance—the most important brand of Carmel-based CNO Financial Group Inc.—is getting a lot more exposure lately, but not all of it is good.
CNO last month put the Bankers Life name on the former Conseco Fieldhouse, the basketball arena in downtown Indianapolis.
But then last week, CBS News focused on how hundreds of Bankers Life’s long-term-care insurance policyholders have accused the company of having “beat them down with bureaucracy.” CBS reporter Sharyl Attkisson profiled a Kansas man and his family, who, after injuries from a fall in 2010, spent a year repeatedly sending documents to Bankers Life, which repeatedly claimed to have lost them, and therefore delayed covering his medical bills.
The report, which aired on the CBS morning show on Jan. 5, showed images of the Bankers Life website and the company’s headquarters, which is in Chicago.
CBS cited statistics from the National Association of Insurance Commissioners, which showed that Bankers Life received one-third of the complaints against long-term-care insurers in 2010—even though it accounts for less than 6 percent of the market.
Bankers Life & Casualty Co. tends to have more policyholders than other long-term-care insurers, because it writes relatively small-dollar policies for middle-income consumers. Bankers Life, which also sells life insurance, annuities and Medicare supplement policies, has 1.3 million policyholders across the country. Long-term-care insurance accounted for 23 percent of Bankers Life’s nearly $2.6 billion in premiums in 2010.
Bankers Life accounted for 58 percent of CNO’s total sales in 2010, the most recent data available. Even more important, Bankers Life contributed 79 percent of the company's 2010 earnings before interest and taxes.
Citing privacy concerns, Bankers Life wouldn't talk with CBS. In a statement, the insurer said it settled a 2008 action brought by 40 states alleging a pattern of delaying payment to its customers.
Bankers Life noted that it paid out $1.3 billion in claims to policyholders last year. In a statement provided to CBS, officials said the company is "committed to the highest standards for ethics, fairness and accountability."
CBS noted that long-term-care insurance is relatively new and that many companies, including CNO Financial, have acknowledged that early policies—which are now being cashed in—were underpriced considerably to sufficiently cover the current cost of providing in-home and nursing-home care.