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Insurer to Settle Cancellation Class Action

Posted May 11, 2007 12:21 PM CDT
By Debra Cassens Weiss

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In an effort to settle a class-action lawsuit, Blue Cross of California has agreed it won’t cancel health coverage unless it can show deception by a policyholder.

Consumer groups had claimed the insurer had canceled policies for honest mistakes on insurance application forms, often when policyholders submitted claims for treatment, according to the Los Angeles Times.

The proposal will be submitted to a Los Angeles judge on Monday. It would allow consumers to have canceled policies re-evaluated under the new standard or to accept $1,000 to drop their claims.

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