MONTPELIER, Vt. (AP) — Vermont has reached a $1.8 million settlement with a company that sold unapproved and inadequate student health insurance policies at 10 of the state’s colleges and universities, financial regulators announced Tuesday.

The settlement with Companion Life Insurance Company, of Columbia, South Carolina, is the Department of Financial Regulation’s largest settlement with an insurance company, Commissioner Michael Pieciak said at a news conference.

“This is a significant penalty,” Pieciak said. “If you look around at insurance penalties across the country this is not just significant as it relates to Vermont, but nationwide as well.”

The state says the company offered health insurance to more than 2,500 Vermont students in school years 2014-2016. If those policies had been submitted to the state, they would not have been approved because they did not comply with Vermont law or the federal Affordable Care Act, the state said.

Some of the shortcomings included not providing complete coverage for mental health coverage; substance abuse treatment; preventative screenings, including testing for sexually transmitted diseases; or contraceptive management. The insurance also did not provide adequate coverage for athletic injuries, immunizations and some general illnesses, Pieciak said.

As a result, hundreds of claims were improperly denied, and 212 students will share $481,000 in restitution for improperly denied claims.

In addition to the student restitution, Companion will pay a $950,000 administrative penalty to the state of Vermont, $225,000 to Vermont Legal Aid and $150,000 to the Vermont Financial Services Education and Victim Restitution Fund.

Companion did not response to a phone message and email seeking comment. But the settlement agreement signed by Companion President John Wilbur said the company alleges the failure to submit documents to the state was due to an error on the part of certain employees.

After the company learned of the unapproved rates and forms, it “worked diligently” with the state to receive approval for the forms used during the 2016-2017 academic year, the settlement agreement said.

The company is not currently offering student health insurance policies in Vermont.

The company has also taken steps to ensure such problems do not occur again.

The insurance plans were included as a line item on student tuition bills at 10 Vermont schools.

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