Cigna Health and Life Insurance Co. was fined$2 million on Tuesday by New York’s Department of FinancialServices for violating state insurance law.

An investigation by the department found that Connecticut-basedCigna illegally sold stop-loss insurance, which may only be sold tolarge group employers that self-fund underlying medical expenses in aneffort to limit their liability in the event of an unexpectedamount of claims. The investigation also found that Cigna illegallysold fully insured policies outside of the state to New York-basedsmall groups with New York employees, which harmed thecommunity-rating program, DFS said. New York mandates purecommunity rating, meaning that insurers aren’t able to charge moreto older customers who are more likely to have a higher need formedical care.

“By deliberately choosing to write New York risks outside of NewYork, Cigna’s actions harmed New York’s community-rating programfor small group employers,” Superintendent Maria Vullo said in anews release. “Cigna cherry-picked risks, which may have improperlyinduced forum shopping in the New York small-group market.”