Cigna 2013 Annual Report Download - page 44

PART I
ITEM 1. Business
$3.4 billion in separate account assets that support Variable
Separate Accounts
Universal Life products sold as a part of our corporate-owned life
Our subsidiaries or external advisors manage Separate Account assets insurance business, as well as through our Global Supplemental
on behalf of contractholders. These assets are legally segregated from Benefits segment; and
our other businesses and are not included in General Account $1.1 billion in separate account assets that support primarily health
Invested Assets. Income, gains and losses generally accrue directly to care and other disability and life products.
the contractholders. As of December 31, 2013, our Separate Account
assets consisted of:
$3.8 billion in separate account assets that constitute a portion of
the assets of the Cigna Pension Plan;
Regulation
The laws and regulations governing our business continue to increase increases our exposure to certain U.S. laws, such as the Foreign
each year and are subject to frequent change. We have established Corrupt Practices Act of 1977 (‘‘FCPA’’). See page 15 for further
policies and procedures to comply with applicable requirements. discussion of international regulations.
Our insurance and HMO subsidiaries must be licensed by the The business of administering and insuring employee benefit
jurisdictions in which they conduct business. These subsidiaries are programs, particularly health care programs, is heavily regulated by
subject to numerous state, federal and international regulations state and federal laws and administrative agencies, such as state
related to their business operations, including, but not limited to: departments of insurance and the federal departments of Labor,
Health and Human Services, Treasury and Justice and the Internal
the form and content of customer contracts including benefit Revenue Service, as well as the courts. Health savings accounts, health
mandates (including special requirements for small groups); reimbursement accounts and flexible spending accounts also are
regulated by the U.S. Department of the Treasury and the Internal
premium rates and medical loss ratios;
Revenue Service.
the content of agreements with participating providers of covered
Our operations, accounts and other books and records are subject to
services;
examination at regular intervals by regulatory agencies, including state
producer appointment and compensation; insurance and health and welfare departments, state boards of
pharmacy and the Centers for Medicare and Medicaid Services
claims processing and appeals;
(‘‘CMS’’) to assess compliance with applicable laws and regulations. In
underwriting practices; addition, our current and past business practices are subject to review
by, and from time to time we receive subpoenas and other requests of
reinsurance arrangements;
information from, various state insurance and health care regulatory
unfair trade and claim practices; authorities, attorneys general, the Office of Inspector General, and
other state and federal authorities, including inquiries by, and
protecting the privacy and confidentiality of the information
testimony before committees and subcommittees of the U.S.
received from customers;
Congress regarding certain of its business practices. These
risk sharing arrangements with providers; examinations, reviews, subpoenas and requests may result in changes
to or clarifications of our business practices, as well as fines, penalties
reimbursement or payment levels for Medicare services; or other sanctions.
advertising; and
the operation of consumer-directed plans (including health savings
Regulatory and Legislative Developments
accounts, health reimbursement accounts, flexible spending The federal and state governments in the U.S. as well as governments
accounts and debit cards). in other countries where we do business continue to enact and
In addition, our international subsidiaries comply with regulations in seriously consider many broad-based legislative and regulatory
international jurisdictions where foreign insurers may be faced with proposals that could materially impact various aspects of our business.
more onerous regulations than their domestic competitors. The
broader regulatory environment may include anti-corruption laws,
economic sanctions laws, various insurance, tax, tariff and trade laws
Health Care Reform
and regulations, corporate governance, employment, intellectual The Patient Protection and Affordable Care Act and the Health Care
property and investment laws and regulation, discriminatory licensing and Education Reconciliation Act (collectively referred to as ‘‘Health
procedures, compulsory cessions of reinsurance, required localization Care Reform’’) mandates broad changes affecting insured and
of records and funds, higher premium and income taxes, and self-insured health benefit plans that impact our current business
requirements for local participation in an insurer’s ownership. In model, including our relationship with current and future customers,
addition, the expansion of our operations into foreign countries
12 CIGNA CORPORATION - 2013 Form 10-K
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