Insurance Regulator Files Action Against Blue Shield of CA, Seeks $12.6M Fine
State Insurance Commissioner Steve Poizner has filed an enforcement action against Blue Shield of California Life & Health Insurance Co on Thursday, accusing the company of illegal behavior toward policy holders and seeking a $12.6 million fine.
Mr. Poizner has asked an administrative law judge to fine Blue Shield $12.6 million after an investigation into consumer complaints yielded 1,200 violations of insurance law in 2004 and 2005.
Poizner said his agency would audit the company's claims handling through the current year and then would scrutinize the state's other major insurers.
"This is very important and people are complaining about it and I assure people we will get to the bottom of it," said Poizner.. "We are sending a message to every health insurance company in California to clean up their act."
The allegations against Blue Shield include retroactive cancellation of policies after insured individuals made claims, denial of legitimate claims and failure to pay claims in a timely manner.
In a statement, Blue Shield President Duncan Ross said the company is "outraged" by the fines for what it considered "nonsubstantive issues." He accused Poizner of trying "to retroactively change the rules in the middle of the game" for the insurance industry.
"The department's position penalizes practices that have been previously approved ... and have been followed for years by all health insurers," Duncan said.
Published on December 14, 2007
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