Markel Insurance Company will issue refunds to more than 22,000 New York students, including 1,200 students at Wells College in Aurora, as part of a settlement announced Tuesday by state Attorney General Eric Schneiderman and Department of Financial Services superintendent Benjamin Lawsky.
An investigation conducted by Lawsky and Schneiderman's offices found that Markel overcharged college students for health insurance, college accident and sports accident insurance plans. State law requires insurance companies to maintain a minimum loss ratio of 65 percent with all of its health plans. But Markel's plans for students did not meet the minimum requirement mandated by the state.
The terms of the settlement will require Markel to pay $2.75 million in restitution to colleges and students. The company will also pay a $990,000 penalty to the state.
"This settlement sends a clear message: Insurance companies, like everyone else, must play by the rules and work together with government to bring down the cost of health care," Schneiderman said.
College students who had a Markel student health insurance, accident insurance or sports accident insurance plan in 2007-08, 2008-09, 2009-10 and 2011-12 will be eligible for a refund. The average refund that will be issued to each student is $107.
Markel no longer sells student health, accident insurance and sports accident insurance plans in New York.
Wells wasn't the only college or university in central New York affected by the settlement. Approximately 2,250 students at Binghamton University and 1,400 at Colgate University will receive refunds.
More than 460 students at SUNY Institute of Technology at Utica/Rome, 150 at Cazenovia College, 30 at Herkimer County Community College and 15 at Finger Lakes Community College will also receive refunds from Markel.