Cigna 2014 Annual Report Download - page 47

PART I
ITEM 1. Business
requirement to file an annual ORSA Summary Report in the lead Our operations in countries outside the United States:
state of domicile, now must be adopted into law by each state. Our are subject to local regulations in the locations in which our
insurance business in the United States will be subject to these subsidiaries conduct business,
requirements that are expected to become effective in 2015. We will
be prepared to file an ORSA Summary Report with our lead state in some cases, are subject to regulations in the locations of
regulator consistent with the requirements. customers, and
in all cases, are subject to the FCPA.
Holding Company Laws
The FCPA prohibits offering, promising, providing or authorizing
Our domestic insurance companies and certain of our HMOs are others to give anything of value to a foreign government official or
subject to state laws regulating subsidiaries of insurance holding employee to obtain or retain business or otherwise secure a business
companies. Under such laws, certain dividends, distributions and advantage. In many countries outside of the United States, health care
other transactions between an insurance or an HMO subsidiary and professionals are employed by the government. Violations of the
its affiliates may require notification to, or approval by, one or more FCPA and other anti-corruption laws may result in severe criminal
state insurance commissioners. and civil sanctions as well as other penalties, and the SEC and
Department of Justice have increased their enforcement activities with
Marketing, Advertising and Products
respect to FCPA. The UK Bribery Act of 2010 applies to all
companies with a nexus to the United Kingdom. Under this act, any
In most states, our insurance companies and HMO subsidiaries are voluntary disclosures of FCPA violations may be shared with United
required to certify compliance with applicable advertising regulations Kingdom authorities, thus potentially exposing companies to liability
on an annual basis. Our insurance companies and HMO subsidiaries and potential penalties in multiple jurisdictions.
are also required by most states to file and secure regulatory approval
of products prior to the marketing, advertising, and sale of such If our employees or agents fail to comply with applicable laws
products. governing our international operations, we may face investigations,
prosecutions and other legal proceedings and actions that could result
in civil penalties, administrative remedies and criminal sanctions. See
Licensing Requirements
the Risk Factors section beginning on page 18 for a discussion of risks
Certain of our subsidiaries are pharmacies that dispense prescription related to operating globally.
drugs to participants of benefit plans administered or insured by our
HMO and insurance company subsidiaries. These pharmacy-
Federal Regulations
subsidiaries are subject to state licensing requirements and regulation
as well as U.S. Drug Enforcement Agency registration requirements.
Employee Retirement Income Security Act and the
Other laws and regulation affecting our pharmacy-subsidiaries include
Public Health Service Act
federal and state laws concerning labeling, packaging, advertising and
adulteration of prescription drugs and dispensing of controlled Our domestic subsidiaries sell most of their products and services to
substances. sponsors of employee benefit plans that are governed by the Employee
Retirement Income Security Act of 1974, as amended (‘‘ERISA’’).
Certain subsidiaries contract to provide claim administration, ERISA is a complex set of federal laws and regulations enforced by the
utilization management and other related services for the IRS and the Department of Labor, as well as the courts. Our domestic
administration of self-insured benefit plans. These subsidiaries may be subsidiaries are subject to requirements imposed by ERISA affecting
subject to state third-party administration and other licensing claim payment and appeals procedures for individual health insurance
requirements and regulation. and insured and self-insured group health plans and for the insured
Our international subsidiaries are often required to be licensed when dental, disability, life and accident plans we administer. Our domestic
entering new markets or starting new operations in certain subsidiaries also may contractually agree to comply with these
jurisdictions. The licensure requirements for these subsidiaries vary by requirements on behalf of the self-insured dental, disability, life and
country and are subject to change. accident plans they administer.
Many provisions of Health Care Reform impacting insured and
International Regulations
self-insured group health plans were incorporated into ERISA. The
health insurance reform provisions under ERISA were also
Our operations outside the United States expose us to laws of multiple incorporated into the Public Health Service Act and are directly
jurisdictions and the rules and regulations of various governing bodies applicable to health insurance issuers (i.e., health insurers and
and regulators, including those related to financial and other HMOs).
disclosures, corporate governance, privacy, data protection, data
mining, data transfer, labor and employment, consumer protection, Plans subject to ERISA also can be subject to state laws and the legal
direct-to-consumer communications activities, anti-corruption and question of whether and to what extent ERISA preempts a state law
anti-money laundering. Foreign laws and rules may include has been, and will continue to be, subject to court interpretation.
requirements that are different from or more stringent than similar
requirements in the United States.
CIGNA CORPORATION - 2014 Form 10-K 15
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