Beware of CUNA Mutual Insurance Group

My parents had been firm believers in life insurance policies for as long as I can remember. I recall, even in my teens, calculating premium payment amounts over a number of years, looking at the face value and wondering why anyone would bother buying insurance policies. So, you see, life insurance had been an ongoing topic in my family for many years, but even with that in mind, we were totally unprepared for what actually did happen:

In December 2008, my mother, Mary Sina, who was living in Santa Fe, New Mexico, called to say that she would not be joining us for the holidays, because she was having trouble shaking a head cold. Four months later, she was still claiming to have the same cold so in April 2009, my husband and I went to Santa Fe to celebrate her 84th birthday with her.

What we found upon our arrival amid piles of newspapers, unopened mail and Christmas gifts in an uncharacteristically filthy apartment, was a woman who had seemed to have lost interest in most everything, which included such basic necessities as grocery shopping and paying bills. Long story short, she was diagnosed with Dementia.

We arranged meal delivery, automatic prescriptions, cleaning lady and online bill pay so that she could continue to live on her own without liability. Then began the task of taking care of other matters that had come unraveled during that period of neglect. She had managed to keep up with household expenses with the help of friends or by making payments if a service was interrupted; occurrences that were completely out of character for my mother.

Among the unopened mail, we discovered that she had several life insurance policies purchased from various companies, all of which had lapsed. I can equivocally say that, although time consuming, across the board, reinstating the policies was a simple enough matter of providing the proper paperwork and a check for the outstanding balance and her polices were reinstated as before.

All except for one company, CUNA Mutual Insurance Group, from whom she had purchased policies in 1992 and in 2000 which would automatically convert from whole life insurance coverage to term life coverage, in the event of a default on her premium payments. Despite the extenuating medical circumstances and the longevity of the account, CUNA refused to revert the policies back to their original state. It was also the amount that CUNA claimed that she owed them, to bring what were now term life polices up to date, in relation to what I had paid to reinstate the other policies, that called my attention to some serious discrepancies between what was printed on the policy and what was owed on the billing statement.

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CUNA Mutual Insurance Group is the insurance arm of the Credit Union National Association (CUNA), who according to their website, is the premier national trade association serving 90% of America’s credit unions. In a written testimony before The Senate Banking Committee dated March 24, 2009, Dan Mica, President and CEO of the Credit Union National Association counted “92 million members.” The actual purpose of the document was to “express the need for maintaining an independent federal regulatory agency for federally-insured credit unions” separate from those that regulate other US financial institutions. In it Mica claimed that “Credit Unions did not in any way contribute to the current financial debacle…..Therefore it is imperative that credit unions not be swept up in the tide of regulatory reform that is so essential for some other parts of the financial system.” The Credit Union National Association was also lobbying strongly, in 2009, for a raise in member business cap lending.

CUNA Mutual Insurance Group sends out insurance materials to credit union members immediately upon their joining, announcing $1,000.00 of accidental death & dismemberment coverage, provided free of charge, and the opportunity to purchase other plans. In my parent’s case, their introduction to CUNA Insurance came through the Land of Enchantment Federal Credit Union.

I spent several months communicating with various departments at CUNA Mutual, trying unsuccessfully to get a copy of her file so I sought out the help of the NM State Superintendent of Insurance and eventually did receive it. If I had not seen it with my own eyes, I would never have believed what fragmented paperwork exists in the inner files of such a lucrative company. The CUNA files contained a handwritten application for a policy conversion that was conducted over the telephone, which apparently required no signature verification from my mother. I couldn’t help but wonder how any prudent person would elect to change an $81.00 yearly premium to a $138.79 quarterly premium for the exact same amount of coverage. Prior to the onset of Mary’s illness, she had been a very practical individual, but by this time was not able to shed any light on how this actually took place.

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So I wrote another letter directly to Jeff Post, CEO of CUNA Mutual Insurance Group; Dan Mica, then President of the Credit Union National Association; Mo Chavez, the NM State Superintendent of Insurance; and Joe Maldonado, President of Land of Enchantment Federal Credit Union.

I heard back from Gregg Gonzales, from the NM Superintendent of Insurance Office, who basically told me that it was common knowledge that insurance companies were in the business to make a lot of money off of their customers and there was nothing to be done about it. Joe Maldonado, President of Land of Enchantment Credit Union, dismissed me with a shrug and said, “We don’t really have anything to do with the insurance that gets offered to our members.”

I received a letter from CUNA President, Dan Mica’s office telling me that they had forwarded my letter to Jeff Post, who was the CEO of CUNA Mutual Insurance.By then Jeff Post’s office would have been in receipt of my letter twice, first from me and then from Dan Mica’s office, so Jeff Post arrogantly ignored both letters. Incidentally, former CEO of CUNA Mutual Insurance Group, Michael Kitchen, resigned in 2004 after it was disclosed his offering money to employees to go against their union, resulting in a lawsuit against CUNA Mutual by the National Labor Relations Board.

In July of 2010 Mary Sina moved to Southern California to be with her family and her health has improved considerably. While packing up her apartment of 27 years, we discovered that the one questionable policy in our possession was, in actuality, yet a different policy purchased from CUNA Mutual Insurance Group for a ridiculously low “burial” amount, of which there was never any mention from CUNA. We realized that even if we had continued to pay premiums; had my mother died, we would have had no policy with which to collect.

CUNA Mutual Insurance Group thrives on an automatic customer base in the consumer who has chosen to invest their money in a credit union, and trusts that credit union’s choices regarding benefits provided to their members. Because of that automatic customer base, CUNA Mutual Insurance Group appears to be operating with little, if any, restriction or accountability. It would be interesting to see what percentage of their revenue has accrued through people who have just gotten tired of fighting. Although in June, 2009, a South Dakota jury awarded Teri Powell’s estate $6.2 million for a disability claim that she filed when she was diagnosed with cancer in 2005 and CUNA continually denied until her death in 2006. The article also stated that CUNA was appealing that decision on technicalities.

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Most lawsuits appear to be over disability insurance, while others include a 2008 filing by Veronica Keith of Washington over the Accidental Death & Dismemberment policy, which apparently excludes “accidental death caused by, or resulting from, committing or attempting to commit a felony” plus the argument that the 3-year period to file suit had expired. In 2009 Southeast Financial Credit Union filed suit against CUNA Mutual Insurance Society and CUNA Brokerage Services Inc. for misrepresentations regarding deferred compensation plans and variable annuities.

A quick visit to the employee review of employer website glassdoor.com gives the overall impression that CUNA Mutual Insurance’s management team is unqualified, unapproachable, and complacent with very little respect given to their staff in general, resulting in a high turn over rate. That might explain why everyone was so hateful to me on the telephone.

Recently, CUNA Mutual Insurance Group advertising mediums have increased exponentially. Not only do I strongly discourage anyone from doing business with them, but please take the time to make sure that your parent’s insurance policies are updated and intact before it is too late. We need to protect our parents from the nice, smiling salesperson who assures them that checking the little provision box is really in their best interest.

Patricia Cunliffe

626.797.9926

[email protected]

Patricia is a freelance journalist, documentary filmmaker & Santa Fe native living in Southern California

SOURCES:

Michael Kitchen/NLRB story:

http://www.scfl.org/?ulnid=957

http://www.scfl.org/?ulnid=1019

http://www.allbusiness.com/banking-finance/banking-institutions-systems/14725798-1.html

Teri Powell story:

http://law.freeadvice.com/insurance_law/insurers_bad_faith/cuna-mutual-laible-for-bad-faith.htm

Veronica Keith story:

http://wa.findacase.com/research/wfrmDocViewer.aspx/xq/fac.%2FFDCT%2FWWA%2F2009%2F20090623_0001469.WWA.htm/qx

Southeast Financial story:

http://www.cutimes.com/2009/09/09/southeast-financial-cu-files-suit-against-cuna-mutual

CUNA Mutual CEO chronological history 2004-2007:

http://keepcunamutual.com/4.pdf

http://www.waxingamerica.com/2008/01/does-cuna-mutua.html

http://www.cuna.org/newsnow/09/system070909-10.html

http://www.cujournal.com/departments/insurance.html

 

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