New York has announced a nearly $4 million settlement with Glen Allen, Va.–based Markel Insurance Co., Inc. resolving an investigation into Markel’s practice of overcharging college students on their health plans.
The settlement means thousands of New York college students, including some in Central New York, can expect a refund of the overcharges.
New York Attorney General Eric Schneiderman and Benjamin Lawsky, superintendent of the New York State Department of Financial Services (DFS), today announced the settlement in a joint news release.
A joint investigation revealed that Markel’s student health-insurance plans, college accident-insurance plans and sports accident-insurance plans failed to meet legal requirements for minimum “loss ratios,” according to Schneiderman’s office.
Failing to meet the legal requirements led to nearly $3 million in overcharges to roughly 22,000 New York students from 34 New York colleges, his office said.
The investigation also revealed that Markel paid “improper” broker bonuses, which created an incentive for the broker to keep loss ratios below the legal minimum, according to the attorney general’s office.
Under the settlement, Markel will pay more than $2.75 million in restitution to New York students and colleges and a $990,000 combined penalty to Schneiderman’s office and DFS, which the offices will split evenly.
The settlement also requires Markel to end its “improper commission practice,” Schneiderman’s office said.
The public universities in New York where Markel overcharged students, and the estimated number of students to receive refunds, include Binghamton University (2,250 students); SUNYIT in Marcy (463); SUNY Oneonta (1,497); SUNY Potsdam (600); Jefferson Community College (40); and Herkimer County Community College (30).
Private colleges in New York and the estimated number of affected students include Cazenovia College (150); Clarkson University (750); Colgate University (1,400); Elmira College (316); and Wells College (1,200).
The refunds per students will average about $107, according to Schneiderman’s office.
Contact Reinhardt at ereinhardt@cnybj.com