Niagara Gazette —
A $3.65 million settlement has been reached between New York state and the Markel Insurance Company for overcharging roughly 22,000 college students for health insurance, including several who attend Western New York institutions.
State Attorney General Eric Schneiderman said a joint investigation was conducted with his office and the Department of Financial Services, which led to the finding that the insurance company failed to meet legal requirements on student health insurance, college accident insurance and sports accident insurance plans.
The state regulates insurers requiring health plans maintain a minimum "loss ratio" of 65 percent, the amount paid out in claims under a plan.
Markel was deemed to have paid out far less than the minimum in 2007 and 2009, which led to students being overcharged, according to officials, who found the company's violations particularly egregious because many students did not have a choice over health insurance.
Schneiderman said the plans were promoted and endorsed by 34 state colleges, with some requiring students to enroll with Markel without other options.
Among the thousands overcharged, 220 were from Niagara County Community College, 120 from Erie County Community College and 130 attended Niagara University.
Schneiderman said the investigation also showed that the company paid "improper broker bonuses" that incentivized illegalities.
"With the high cost of college already straining family finances across New York students and parents shouldn't have to worry about paying even more for health insurance," he said.
About $2.75 million will be returned to the 22,000 student, while another $990,000 will go to the state.