In addition to backing from the ACLHIC
, the bill has the backing of the American Council of Life Insurers, the National Association of Insurance Financial Advisors of California, and State Farm Insurance Company.
The rescission regulations that are the subject of the ACLHIC
suit follow Hailey which revealed that in California, the test of rescission is different for health plans: [S]ection 1389.3 precludes a health services plan from rescinding a contract for a material misrepresentation or omission unless the plan can demonstrate (1) the misrepresentation or omission was willful, or (2) it had made reasonable efforts to ensure the subscriber's application was accurate and complete as part of the precontract underwriting process.
had asked the department to adopt regulations that would clarify the law's requirements, Wenger said.
Kenny, a judge in Sacramento, has ruled that ACLHIC
that can bring the suit, and that the California department of insurance lacked the statutory authority to define a variety of rescission-related practices as unfair claim settlement practices.
President Brad Wenger said in a statement that member insurers have no problem with the underlying law on policy rescissions and cancellations but believe that the guidance is unclear in places and difficult to implement in others, and that the court ruling is also unclear.
coalition has persuaded California regulators to wait at least until April 15 before issuing any withdrawal notices, according to Gene Livingston, the plaintiffs' lawyer.