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Insurance company to refund area college students for overcharging

Rochester Business Journal
December 3, 2013

More than 900 students at five area colleges are due refunds for health insurance overcharges.

Under a nearly $3.75 million settlement with Markel Insurance Co. Inc., students at Colgate Crozier Rochester Divinity School, Finger Lakes Community College, Monroe Community College, Nazareth College and Roberts Wesleyan College are in line to get money back, state Attorney General Eric Schneiderman and Department of Financial Services superintendent Benjamin Lawsky said Tuesday.

Based in Virginia, Markel offers health and accident plans to students. Its plans have been heavily promoted by some colleges and others have required students to buy coverage from the firm.

The settlement includes $2.75 million marked for refunds to students at 34 New York colleges and universities and a $900,000 fine to be split evenly between the Attorney General’s office and DFS.

The deal was reached after a joint investigation by the Attorney General’s office and DFS. The probe—begun during Gov. Andrew Cuomo’s term as Attorney General and continued under Schneiderman—found that the Virginia-based insurance carrier failed to maintain minimum loss ratios in student health, college accident and sports accident insurance plans.

The settlement covers plans issued in Markel’s 2007-‘08, 2009-‘10 and 2011-‘12 policy years. In those years the company failed to meet the minimum 65 percent loss ratio, meaning that its administrative costs ate up more than 35 percent of premiums collected and it consequently spent less than that percentage to pay students’ claims.

“Running up the health insurance bills of students and parents trying to make ends meet is objectionable, and simply will not be tolerated,” Lawsky said.

Investigators also discovered that the insurance company made a deal with at least one broker calling for the insurer to give the broker a bonus if loss ratios fell below 60 percent, the state officials said.  

Markel no longer offers college plans in New York. 

(c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail

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