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Docket No. INS-12-204

This Consent Agreement is entered into by and among FIDELITY AND GUARANTY INSURANCE CO., METLIFE INSURANCE COMPANY OF CONNECTICUT, UNITED STATES FIDELITY AND GUARANTY CO., TRAVELERS CASUALTY AND SURETY CO., PHOENIX INSURANCE CO., TRAVELERS CASUALTY INSURANCE COMPANY OF AMERICA, TRAVELERS INDEMNITY COMPANY OF AMERICA, TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, ST. PAUL MERCURY INSURANCE CO., ST. PAUL FIRE AND MARINE INSURANCE CO., ST. PAUL GUARDIAN INSURANCE CO., STANDARD FIRE INSURANCE CO., CHARTER OAK FIRE INSURANCE CO., DISCOVER PROPERTY AND CASUALTY INSURANCE CO., FARMINGTON CASUALTY CO., AND TRAVELERS COMMERCIAL CASUALTY CO., each of which is a subsidiary of the Travelers Insurance Group (collectively, the “Com­panies” or “Travelers Insurance Group”; individually, a “Company”), the Maine Superintendent of Insurance (the “Superinten­dent”), and the Office of the Maine Attorney Gen­eral (the “Attorney General”).  Its purpose is to bring to a halt, without resort to an adjudicatory proceeding, violations of 39-A M.R.S.A. § 359(2) certified to the Superintendent by the Maine Workers’ Compensation Board (the “Board”) pursuant to that provision.

  1. The Superintendent is the official charged with administering and enforcing Maine’s insurance laws and regulations.
  2. Each Company is organized and domiciled, and is licensed to do business in Maine, as follows:

Name of Company



Maine License Number

Date of First Maine License

Fidelity & Guaranty Insurance Co.





United States Fidelity and Guaranty Co.





Travelers Casualty and Surety Co.





Phoenix Insurance Co.





Travelers Casualty Insurance Company of America





Travelers Indemnity Company of America





Travelers Property Casualty Company of America





St. Paul Mercury Insurance Co.





St. Paul Fire & Marine Insurance Co.





St. Paul Guardian Insurance Co.





Standard Fire Insurance Co.





Charter Oak Fire Insurance Co.





Discover Property & Casualty Insurance Co.





Farmington Casualty Co.





Travelers Commercial Casualty Co.





Each Company has authority to insure employers for claims arising under the Maine Workers’ Compensation Act of 1992, M.R.S.A. Title 39-A, as amended, and regulations of the Board issued there­under (the “WCA”).


In October, 2007, the Board’s Monitoring Audit & Enforcement Division (the “MAE Divi­sion”) audited the records of the Companies with respect to claims filed under the WCA with dates of injury in 2006.  This audit focused on compli­ance with WCA requirements for:  form filing, timeli­ness of indemnity payments, and accuracy of indemnity bene­fits.


On March 10, 2010, the Board issued a Compliance Audit Report detail­ing its findings (the “Report”). 


In August, 2010, the Board and the Travelers Insurance Group entered into 23 consent decrees, in lieu of administrative hearings, addressing the findings in the Report.  In one such decree (the “Consent Decree”), the Travelers Insurance Group agreed that it had “engaged in patterns of questionable claims-han­dling tech­niques in violation of Section 359(2)” of the WCA for the following reasons:  (a) issues of non-compliance found in 2008 audit similar to findings in 2004 audit, (b) compliance rates of the 2004 corrective action plan and market conduct examination not consistently maintained, (c) failure to timely file forms with the Board, (d) reporting incorrect information on Board forms, (e) failure to distribute Board forms in accordance with Rules and Regulations, (f) failure to pay benefits timely, and (g) failure to pay or accurately pay claims.


On August 16, 2010, the Board certified these findings to the Superintendent as required by 39-A M.R.S.A. § 359(2).


Travelers and its claim administrators have voluntarily participated in multiple WCB training sessions that were held for all carriers, including as recently as April 14 – 15, 2011.



  • 39-A M.R.S.A. § 359(2) provides in part that:

[T]he [workers’ compensation] board … upon finding, after hearing, that an employer, insurer or 3rd-party administrator for an employer has engaged in a pattern of question­able claims-handling techniques or repeated unreasonably contested claims … shall cer­tify its findings to the Superintendent of Insurance, who shall take appropriate action so as to bring any such practices to a halt.


  • Each Company violated 39-A M.R.S.A. § 359(2) by engaging in a pattern of ques­tion­able claims-handling techniques and/or repeated unreasonably contested claims through December 31, 2006. 
  • The Superintendent is required, pursuant to the Board’s August 16, 2010 certification of its findings that each Company engaged in a pattern of ques­tion­able claims-handling techniques and/or repeated unreasonably contested claims, to take appropriate action to bring those practices to a halt. 


At a minimum, such procedures must include plans for:

  • ensuring compliance with the benchmarks in Exhibit A;
  • ensuring supervisory and front-line staff are experienced in handling workers’ compensation claims in Maine;
  • training in-house and third-party administrator claims personnel on the provisions of the WCA concerning derivation of benefit levels from average weekly wages and accuracy of indemnity payments;
  • ensuring that employers cooperate in meeting the reporting requirements of the WCA;
  • ensuring that third-party administrators working on behalf of the Travelers Insurance Group comply with the requirements of the WCA;
  • maintaining claims payment standards through ongoing staff and third-party administrator education and super­vision;
  • implementing adequate claim review procedures, to include monitoring the accu­racy and timeliness of WCB form filings and indemnity payments; and
  • auditing, on at least a quarterly basis, all indemnity claims, excluding those claims audited by the Board as part of the 2011 Claims Audit, to measure compliance with the bench­marks in Exhibit A.

The Travelers Insurance Group shall deliver to the Superintendent and the WCB Deputy Director, MAE Divi­sion, the results of the audits referred to in sub­paragraph (h) for four (4) suc­ces­sive calendar quarters starting with the quarter in which the Travelers Insurance Group executes this Agreement.  The Travelers Insurance Group shall deliver each audit report within thirty (30) days after the end of the applicable calendar quarter.  Within forty-five (45) days thereafter, the Superinten­dent may call a meeting with the Travelers Insurance Group to discuss any concerns he may have with the Traveler Insurance Group’s claims performance during the period covered by such audit report.  Failure to call any such meeting shall not waive any of the Super­in­tendent’s or the Attorney General’s rights under this Agreement.  The Travelers Insurance Group shall deliver with the last audit report (the “Final Self-Audit Report”), a certification in the form attached as Exhibit B, attesting to the accuracy of all claims performance audit infor­mation required under this Agreement.  The Travelers Insurance Group shall also deliver, upon the Superintendent’s or the WCB Deputy Director’s request, any and all work papers and documents, in any format, in its possession, custody or control, related to any Self-Audit Report.

  • The Travelers Insurance Group shall, for the period starting January 1, 2007  and ending December 31, 2010:
    • submit to the Bureau of Insurance within 30 days of the execution of this Agreement, an electronic spreadsheet listing all claims adjusted in the above time periods, excluding those discharged under 39-A M.R.S.A § 352, for the purpose of allowing the Bureau to designate a statistically valid random sample of claims, for each calendar year (the “Designated Claims”), for further review by the Companies;
    • review the Designated Claims, the inca­pacity periods, and indem­nity benefits, penalties and interest originally paid thereon;
    • recalculate the benefits, penal­ties and interest to ensure their compliance with the WCA;
    • pay to the appropriate claimants any deficien­cies, with the penalties and interest provided for in the WCA, and file with the Board such related forms as the WCA requires; and
    • deliver to the Superintendent and the WCB Deputy Director, MAE Division, by the date the Travelers Insurance Group must deliver the Final Self-Audit Report, an electronic spreadsheet report viewable in Microsoft Excel listing each claim so reviewed (the “Look-Back Report”).  The Look-Back Report shall contain the follow­ing data, safeguarded in accordance with the WCA, for each Designated Claim: 
  • the Board number, if known;
  • the claim­ant’s Social Security number (gen­eral for­mat/no dashes);
  • the claimant’s last and first name (in that order);
  • the date of injury;
  • Com­pany name and claim file num­ber; the incapac­ity periods;
  • the amount of indem­nity originally paid;
  • whether or not the claim was settled under 39-A M.R.S.A. § 352 (Y or N) and the date of such settlement;
  • the amount of indem­nity paid after review;
  • the amount of penal­ties paid after review;
  • the amount of inter­est paid after review;
  • the amount of overpayment upon review; and
  • the name of the person con­ducting the review. 

The Travelers Insurance Group shall deliver with the Look-Back Report a certification attesting to the accuracy of all information in the report, in the form attached as Exhibit B.  
This paragraph shall not apply to any claims that are subject to the audits described in paragraph 14, to any claims that have been discharged under 39-A M.R.S.A § 352, or to any claims that were previously presented to any Company or third-party administrator work­ing on behalf of a Company that were previously audited by the Board and subse­quently corrected by the Company or third-party administrator. 

  • Should the Superin­tendent, in his sole and absolute discretion, determine, within twelve (12) months after receiving the (i) Final Self-Audit Report or (ii) Look-Back Report, that the Companies either:
  • on an aggregate basis, did not meet or exceed on average the benefit payment and form filing bench­marks in Exhibit A during the self-audit review period described in paragraph 14, then each Company shall deliver a civil penalty of Two Thousand Five Hundred ($2500) to the Superintendent within thirty (30) days of receiv­ing the determination, and/or
  • failed to correct deficiencies in indemnity benefits as required by paragraph 15.d, including penalties and interest due thereon, pursuant to the WCA, or as may be further required pursuant to paragraph 17, resulting in compliance with the WCA in less than 93 percent of claims required to be reviewed pursuant to those paragraphs, then each Company shall deliver a civil penalty of One Thousand Dollars ($1000) to the Superintendent within thirty (30) days of receiv­ing the determination.

Each Company agrees that (i) any civil penalties assessed under subsection (a) or (b) above will have resulted from its continued failure through the delivery date of either the Final Self-Adult Report or the Look-Back Report, to halt the pattern of ques­tionable claims-handl­ing tech­niques established by the Consent Decree, (ii) in declaring the Civil Penalty due, the Super­in­tendent may rely on the Self-Audit Reports and the Look-Back Report as conclusive evidence of the fact and extent of such failure, and (iii) the amount of this penalty will not limit fur­ther measures, penalties or remedies that the Superinten­dent or the Attorney General may impose or seek under paragraph 27 below.

  • Should the Superintendent, in his sole and absolute discretion, determine within twelve (12) months after receiving either the Look-Back Report or the Board’s report of the 2011 Claims Audit, that the Companies in aggregate, for any calendar year for which claims were reviewed, failed to achieve a 93% compliance rate in accurately calculating either (a) average weekly wage, (b) weekly compensation rate, (c) partial benefits, or (d) indemnity, the Companies shall review all claims paid in each calendar year in which the Companies were noncompliant for the specific purpose of identifying and correcting inaccurate payments to claimants.  Should the Superintendent order such an expanded review, the Companies shall within 12 months complete the review and submit a report to the Superintendent setting forth the process employed to conduct the review and the results of the review.  The Companies shall provide, upon the Superintendent’s request, any additional documentation reasonably necessary for the Superintendent to verify that the review was properly completed.
  • The Companies shall pay, as provided by law, the Superintendent’s reason­able costs and expenses of monitoring their compliance with, and enforcing the Companies’ obligations under, this Agreement.  The Companies shall be jointly and severally liable for these costs and expenses.
  • The Companies shall not recoup any payments of refunds, interest, or civil penalties made under this Agreement or any costs associated with complying with this Agreement in any future rate adjustments.
  • The Travelers Insurance Group shall ensure that third-party administrators working on its behalf comply with the WCA and this Agreement.  The Companies acknowledge their continued responsibility for the actions of any third-party.


  • Any action that this Agreement permits the Superintendent to take may be taken against all or any of the Companies.
  • The Companies waive any:
    • hearing rights arising from this Agreement,
    • any action that may be taken by the Superintendent pursuant to this Agreement, including but not limited to the imposition of the penalty specified in paragraph 16 and agree they will make no appeal from this Agreement; and
    • objection to the Board’s release to the Superintendent and the Attorney General of claim of confidentiality of Board “audit working papers,” as defined in section 153 of the WCA, related to any audit of any Company and, in connection with this waiver, to the use of such papers by the Superintendent and Attorney General for purposes related to the implementation and enforcement of this Agreement.
  • The Companies acknowledge that this Agreement is a public record within the meaning of 1 M.R.S.A. § 402 and will be available for public inspection and copying as provided for by 1 M.R.S.A. § 408, and will be reported to the Regulatory Information Retrieval System database at the National Association of Insurance Commissioners.
  • The Companies have been advised of their right to consult with counsel and have, in fact, consulted with counsel before executing this Agreement.
  • This Agreement does not bind any person or entity not a party to this Agreement, or limit the Superintendent’s ability to seek any available legal remedy for any viola­tions of the WCA or the Maine Insurance Code against any Travelers Insurance Group affiliate or subsidi­ary not a party to this Agreement or against any entity from which any Company obtains WCA claims administrator services.
  • Nothing in this Agreement shall limit the ability of the Superintendent, in his sole and absolute discretion, in order to determine whether any Company has brought to a halt all violations of 39-A M.R.S.A. § 359(2) established by the Consent Decree, to investigate:
    • the handling of the Travelers Insurance Group’s indemnity claims having dates of injury after December 31, 2006;
    • the accuracy of the self-audit quarterly review described in paragraph 14; or
    • the accuracy of the indemnity claim review described in paragraph 15;
    • any other matters involving potential violations of the WCA or the Maine Insurance Code.
  • The purpose of the self-audit quarterly review described in paragraph 14 and the indem­nity claim review described in paragraph 15 is to bring to a halt the violations established by the Consent Decree.  Therefore, in consideration of the Companies’ execution of this Agreement, the Superintendent and the Attorney General shall not pursue civil penalties, disciplinary measures or other civil or administrative sanctions, other than those agreed to herein, for violations established by the Consent Decree that continue through the period of the paragraph 14 and paragraph 15 reviews.  However, the Superintendent or the Attorney General may pursue any available legal remedy, including without limitation imposition of additional civil penalties and the limitation, suspension or revocation of workers’ compensation authorities issued to any Company by the Superintendent should any Company:

a.         engage in conduct that violates 39-A M.R.S.A. § 359(2) after the period of the paragraph 14 and paragraph 15 reviews; or
b.         violate any provision of this Agreement other than as described in subsections (a) and (b) of paragraph 16; or
c.         otherwise violate Maine law.

[The remainder of this page is left blank intentionally.]

Dated:                        , 2011

[name] Company




 Printed Name and Title

Subscribed and sworn to before me this _______ day of ________, 2011.


Notary Public
Printed name
Date commission expires

Dated:                        , 2011



Jonathan R. Bolton
Assistant Attorney General


Date:                        , 2011



Eric A. Cioppa

Exhibit A

Form of Self-Audit Worksheet


FROI Timely Filed

Wage Statement (WCB-2) Filed Timely

Schedule of Dependents (WCB-2A) Filed Timely

MOP (WCB-3 or -4A) Filed Timely

Modification/Reduction (WCB-4, -4A or -8) Filed

Discontinuance (WCB-4, -4A or -8) Filed

NOC (WCB-9) Filed Timely

Initial WCB-11 Filed Timely

Annual WCB-11 Filed W/in 15 Days of Anniversary of Claim

Initial TTD Timely

Subsequent TTD/TPD Timely

Payment of Medical Bills Timely

Payment of Approved Agreements, Orders, Decisions

TTD/TPD Accurate

Average Weekly Wage

Weekly Benefit Rate

Partial Indemnity

Bench­mark (%)



















(#/#) xx%






































































































































































































Exhibit B

Form of Certification





Docket No. INS-12-204

The undersigned, being duly sworn, says:

  • Terms used but not defined in this affidavit shall have the meanings given them in the Consent Agreement entered into between the above Companies, the Superintendent and the Attorney General under Bureau docket number INS-12-204. 
  • I have read and understand the Consent Agreement and exhibits attached thereto.
  • I understand that the Board and Bureau may rely on the truthfulness of the information contained in and materials attached to this affidavit and that the truthfulness of this information is material to the ability of the Superintendent and the Board to evaluate the Companies’ compliance with the Consent Agreement.
  • I have read the materials attached to this affidavit.  They accurately and completely summarize the information contained therein, as required by paragraph 14 of the Consent Agreement.
  • I hold the position identified below and have obtained all necessary authority from each of the Companies to give this affidavit on its behalf in connection with the proceedings undertaken as Bureau Docket No. INS-12-204. 

(name typed or printed)
(position typed or printed)
(company name typed or printed)

State of _______________
County of _____________

            Personally appeared before me on _____________, 2012, the above named ___________ __________________ and, being duly sworn, affirmed that this affidavit is based upon his or her personal knowledge and is true and correct.
                        Before me,
Notary Public/Attorney-at-Law
[seal]                                        Printed Name: _____________________
My Commission Expires: ___________



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Last Updated: August 22, 2012