Blue Shield of California Takes Another Rescission Hit
Blue Shield of California got more bad news in the on-going battle to defend its rescission practices in the golden state. You can read about it here in the L.A. Times. A couple of days ago an intermediate level state appeals court ruled that in order to justify rescission, Blue Shield of California must show that the applicant willfully misrepresented his health history. In the alternative, the ruling requires an insurer to demonstrate that they made "reasonable efforts" to ensure the applicant's statements were accurate and complete when they insurer initially evaluated the application. The case is Hailey v. California Physician's Service (d/b/a Blue Shield of California). You can find a copy of the decision at the court's website here. The decision reverses a trial court ruling in favor of Blue Shield. A measure of the importance of this battle to both sides in the argument is reflected by the number of amicus briefs submitted on support of each party.