Aetna 2012 Annual Report Download - page 52

Annual Report- Page 46
Life and Disability Insurance
Our life and disability insurance operations are subject to extensive regulation. Changes in these regulations, such
as expanding the definition of disability or mandating changes to claim payment, determination and/or settlement
practices, could have a material adverse impact on our life insurance and/or disability insurance operations and/or
operating results. In July 2011, New York notified insurers that it expects insurers to, and would be amending its
regulations to require insurers to, regularly consult the U.S. Social Security Administration's Death Master File or a
similar database to determine if unclaimed death benefits may be payable under life insurance and similar products,
to pay any such benefits and to make certain other business process changes. Since that time, legislation has been
enacted in New York and enacted or introduced in a number of other states requiring life insurers to take additional
steps to identify unreported deceased policy holders, and make other changes to their claim payment and related
escheat practices, including consultation of certain databases. New York is one of over 35 states that are
investigating life insurers' claims payment and related escheat practices, and these investigations have resulted in
significant charges to earnings by other life insurers in connection with related settlement agreements. We have
received requests for information from a number of states, including New York, and certain of our subsidiaries are
being audited, with respect to our life insurance claim payment and related escheat practices.
Consumer Protection Laws
Certain of our businesses participate in direct-to-consumer activities and are subject to emerging regulations
applicable to on-line communications and other general consumer protection laws and regulations.
International Regulation
We continue to expand our Health Care operations that are conducted in foreign countries. We currently have
insurance licenses in several countries and do business in over thirty countries. These international operations are
subject to different, and sometimes more stringent, legal and regulatory requirements, which vary widely by
jurisdiction, including anti-corruption laws; economic sanctions laws; various privacy, insurance, tax, tariff and
trade laws and regulations; corporate governance, privacy, data protection, data mining, data transfer, labor and
employment, intellectual property, consumer protection and investment laws and regulations; discriminatory
licensing procedures; compulsory cessions of reinsurance; required localization of records and funds; higher
premium and income taxes; and requirements for local participation in an insurer's ownership. In addition, the
expansion of our operations into foreign countries increases our exposure to the anti-bribery, anti-corruption and
anti-money laundering provisions of U.S. law, including the Foreign Corrupt Practices Act of 1977 (the “FCPA”),
and foreign laws, including the U.K. Bribery Act 2010 (the “UK Bribery Act”).
The FCPA prohibits offering, promising or authorizing others to give anything of value to a foreign government
official to obtain or retain business or otherwise secure a business advantage. We also are subject to applicable ant-
corruption laws of the jurisdictions in which we operate. Additionally, in many countries outside the U.S., health
care professionals are employed by the government. Therefore, our dealings with them are subject to regulation
under the FCPA. Violations of the FCPA and other anti-corruptions laws may result in severe criminal and civil
sanctions as well as other penalties, and the SEC and the DOJ have increased their enforcement activities with
respect to the FCPA. The UK Bribery Act is an anti-corruption law that applies to all companies with a nexus to the
United Kingdom and whose scope is broader than the FCPA. It is yet to be seen how the UK Bribery Act will be
enforced, but any voluntary disclosures of FCPA violations may be shared with the UK authorities, thus potentially
exposing companies to liability and potential penalties in multiple jurisdictions. We have internal control policies
and procedures and have implemented training and compliance programs for our employees to deter prohibited
practices. However, if our employees or agents fail to comply with applicable laws governing our international
operations, we may face investigations, prosecutions and other legal proceedings and actions which could result in
civil penalties, administrative remedies and criminal sanctions. See “Our growth strategy includes expanding our
foreign operations and entering targeted new countries outside the United States. Our International operations face
political, legal and compliance, operational, regulatory, economic and other risks that we do not face or are more
significant than in our domestic operations” beginning on page 53 for a discussion of the risks related to operating
globally.