Anthem Blue Cross BUSTED in California

Insurance Commissioner Poizner Announces Hundreds of Legal Violations During an Investigation of Anthem Blue Cross' Practices

Insurer Faces Multimillion Dollar Fine After Review Finds 700 Plus Claims Handling Violations

California Insurance Commissioner Steve Poizner today announced that an investigation of consumer complaints filed against Anthem Blue Cross' claims handling practices has uncovered more than 700 violations of state law.

"When consumers pay their premiums every month, they expect insurance companies to uphold their part of bargain and pay claims quickly, correctly and comply with all other legal requirements," Commissioner Poizner said. "Our investigation has revealed more than 700 instances where Anthem Blue Cross has violated the state's claims handling laws. From a failure to respond when the Department of Insurance requested information to investigate complaints to misrepresenting the facts to consumers, these are serious violations and if they are proven in the enforcement action, Anthem Blue Cross will be held liable for them."

The California Department of Insurance (CDI) investigated consumer complaints filed against Anthem Blue Cross' claims handling practices in 2006 through 2009. This review found more than 700 violations of the law. The maximum penalty for each violation is $10,000, if the action was found to be willful.

Specifically, the market conduct exams found the following violations of law:

Type of Violation
Quantity

Failure to pay claims in 30 days 277 violations
Failure to respond to the CDI in reasonable time so we can investigate complaints 143 violations
Misrepresenting facts or policy provisions to insureds 66 violations
Failure to pay Interest on unreimbursed claims 25 violations
Failure to pay or contest a claim within 30 days 21 violations
Unreasonably low settlement offers 22 violations
Miscellaneous delays and other claims handling violations 178 violations



The official Accusation and Order to Show Cause will be filed with the Office of Administrative Hearing later today. When it is filed, it will be posted on the CDI Web site.

During the last three years, CDI has finished 10 market conduct exams of the top health insurers. Six exams were completed and four are in progress. So far, three of the six completed exams have resulted in enforcement actions and led to groundbreaking agreements with insurers that helped 4,000 consumers regain access to insurance after their coverage was improperly rescinded. They also led to the following actions:

· Anthem Blue Cross: $1 million fine, offer of new insurance for those who had their insurance policies rescinded, reimburse consumers for out-of-pocket expenses and take corrective action

· Blue Shield: Offer of new insurance for those who had their insurance policies rescinded, reimburse consumers for out-of-pocket expenses and take corrective action.

· Health Net: $3.6 million fine, $7.2 million in waived insurance premiums, offer of new insurance for those who had their insurance policies rescinded, reimburse consumers for out-of-pocket expenses and take corrective action.