Re: AKICIF: Kaiser vs. Blue Cross?

On 25 Feb 2008 20:22:37 -0500, "Keith F. Lynch" <kfl@[EMAIL PROTECTED]
>
wrote:

>Daniel R. Reitman <dreitman@[EMAIL PROTECTED]
> wrote:
>> "Keith F. Lynch" <kfl@[EMAIL PROTECTED]
> wrote:
>>> I have mixed feelings.  Apparently it was canceled because it turned
>>> out she lied on the application.  This makes me a lot less
sympathetic.
>>                                                  /\
>>                                     [citation needed]
>
>> The story I found doesn't have this detail.
>
>http://www.dailybreeze.com/business/ci_8342825
>
>  Health Net argued that Bates had failed to mention a heart condition
>  and misstated her weight on her application.
>
>I saw the headline on cnn.com, but it was a video link, so I did a
>Google news search, and that was the first hit on "canceled insurance."

OK.  I'm reading the actual opinion now.
http://www.calendarlive.com/media/acrobat/2008-02/35955051.pdf

Apparently, under California law, an insurer is allowed to rescind for
a false statement on the application only if the applicant knew it was
false and appreciated the materiality of the falsehood.  (Opinion at
13 (citing Thompson v. Occidental Life Ins. Co., 9 Cal. 3d 909, 916,
___ P2d ___ (1973).)  In addition, the arbitrator found that the agent
who sold the policy failed to explain the significance of his
questions regarding Ms. Bates' medical history, and she thought it was
a rotine run-through to transfer from one carrier to another. (Opinion
at 16.)  He also found that the agent changed Ms. Bates' weight
without obtaining her written consent, as required by statute. (Id. at
16 (citing Cal Ins Code @[EMAIL PROTECTED]
 10382).)  As a result, Health Net should
have investigated before issuing the policy.

Finally, California law specifically prohibits holding an insured to a
statement in an application unless the application is attached to or
endorsed on the policy.  (Cal. Ins. Code @[EMAIL PROTECTED]
 10381.5.)  The arbitrator
found that Health Net failed to comply with this requirement. (Opinion
at 17.)

More insidious is the finding that Health Net gave bonuses for meeting
policy rescission quotas.  (Opinion at 17.)

						Dan, ad nauseam