CDI ANNOUNCES PROSECUTION OF UNITED/PACIFICARE PROCEEDS
TO ADMINISTRATIVE HEARING
Follow-up Market Conduct Examination Commenced
The California Department of Insurance (CDI) announced today that its enforcement action against PacifiCare Life and
Health Insurance Company is proceeding to administrative hearing.
Last year, Commissioner Poizner filed an Accusation and Order to Show Cause against PacifiCare alleging thousands of
violations of the California Insurance Code based on PacifiCare’s failure to properly process claims from physicians, failure
to meet its payment obligations on a timely basis, and a host of other improper claims paying practices. The alleged
violations came on the heels of PacifiCare’s acquisition by United Health Group, now the largest health insurance company
in the United States. Since filing the Accusation, the Department of Insurance has continued to receive complaints from
patients and providers about PacifiCare. A copy of the Accusation is found by selecting this link.
“The charges against PacifiCare are very serious,” said the Department’s General Counsel, Adam Cole, who heads the
prosecution team. “PacifiCare is entitled to defend itself against these charges, but if the charges are proved, the public is
entitled to penalties commensurate with the systematic and knowing disregard of consumers’ rights laid out in the
Accusation.”
The hearing is expected to begin later this year. It will be conducted before an Administrative Law Judge (ALJ), who will
propose a decision to the Commissioner. Commissioner Poizner will make the agency’s final decision following receipt of
the ALJ’s recommendation.
The Department also has commenced a follow-up market conduct examination of PacifiCare. An initial market conduct
examination that covered the period June 23, 2006 to May 31, 2007 disclosed thousands of violations that served as the
basis of the Accusation. The Department’s follow-up examination will, among other things, investigate PacifiCare’s claims
processing practices for the periods January 1, 2006 through June 22, 2006 and June 1, 2007 through April 1, 2009.
Commissioner Poizner has worked tirelessly to protect consumers and ensure health insurance companies fulfill their
obligations.
Last week, Commissioner Poizner introduced historic regulations to prevent the practice of unfair rescissions in the
individual health insurance industry. These regulations marked California's first-ever regulatory steps to clarify rescission
laws, preventing the industry practice of unfairly rescinding health insurance policies. Even prior to announcing the
regulations, Commissioner Poizner has taken decisive action against improper rescissions since taking office in 2007,
cracking down on the three largest individual health insurance companies in the state for engaging in the practice. The
Commissioner established requirements within each settlement to ensure that these companies would not illegally rescind
policies in the future. Poizner also worked to get offers of reinstated coverage for 4,000 customers whose policies CDI
alleges were illegally rescinded
TO ADMINISTRATIVE HEARING
Follow-up Market Conduct Examination Commenced
The California Department of Insurance (CDI) announced today that its enforcement action against PacifiCare Life and
Health Insurance Company is proceeding to administrative hearing.
Last year, Commissioner Poizner filed an Accusation and Order to Show Cause against PacifiCare alleging thousands of
violations of the California Insurance Code based on PacifiCare’s failure to properly process claims from physicians, failure
to meet its payment obligations on a timely basis, and a host of other improper claims paying practices. The alleged
violations came on the heels of PacifiCare’s acquisition by United Health Group, now the largest health insurance company
in the United States. Since filing the Accusation, the Department of Insurance has continued to receive complaints from
patients and providers about PacifiCare. A copy of the Accusation is found by selecting this link.
“The charges against PacifiCare are very serious,” said the Department’s General Counsel, Adam Cole, who heads the
prosecution team. “PacifiCare is entitled to defend itself against these charges, but if the charges are proved, the public is
entitled to penalties commensurate with the systematic and knowing disregard of consumers’ rights laid out in the
Accusation.”
The hearing is expected to begin later this year. It will be conducted before an Administrative Law Judge (ALJ), who will
propose a decision to the Commissioner. Commissioner Poizner will make the agency’s final decision following receipt of
the ALJ’s recommendation.
The Department also has commenced a follow-up market conduct examination of PacifiCare. An initial market conduct
examination that covered the period June 23, 2006 to May 31, 2007 disclosed thousands of violations that served as the
basis of the Accusation. The Department’s follow-up examination will, among other things, investigate PacifiCare’s claims
processing practices for the periods January 1, 2006 through June 22, 2006 and June 1, 2007 through April 1, 2009.
Commissioner Poizner has worked tirelessly to protect consumers and ensure health insurance companies fulfill their
obligations.
Last week, Commissioner Poizner introduced historic regulations to prevent the practice of unfair rescissions in the
individual health insurance industry. These regulations marked California's first-ever regulatory steps to clarify rescission
laws, preventing the industry practice of unfairly rescinding health insurance policies. Even prior to announcing the
regulations, Commissioner Poizner has taken decisive action against improper rescissions since taking office in 2007,
cracking down on the three largest individual health insurance companies in the state for engaging in the practice. The
Commissioner established requirements within each settlement to ensure that these companies would not illegally rescind
policies in the future. Poizner also worked to get offers of reinstated coverage for 4,000 customers whose policies CDI
alleges were illegally rescinded
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