Disability Insurers File Lawsuit Against Changes Proposed by Garamendi
The Association of California Life and Health Insurance Companies, America's Health Insurance Plans and the American Council of Life Insurers on Wednesday filed a lawsuit in Sacramento Superior Court seeking to prevent unilateral changes to disability insurance policies, the Sacramento Bee reports.
In an Oct. 3 letter to insurers, Gary Cohen, general counsel to the Department of Insurance, outlined proposed changes to disability policies over concerns that some provisions might contain illegal or inappropriate language. Cohen said the department was considering reviewing all policies to ensure that they comply with seven standards and that they are lawful and appropriate.
In the complaint, the insurers said unilateral changes would limit the variety of disability insurance products consumers could purchase in the state (McIntosh, Sacramento Bee, 12/2).
Brad Wenger, president of the ACLHIC said in a statement, "Left unchallenged, [Insurance Commissioner John Garamendi's (D)] actions would drive up the cost of disability insurance beyond the reach of many employers who provide this benefit to their employees." Wenger added that the changes would result in many California residents with disabilities enrolling in government-sponsored programs (Lawrence, AP/Modesto Bee, 12/2).
AHIP also is seeking a court order to require a public review and comment session about the proposed changes, saying it is required under state administrative laws.
Norman Williams, a spokesperson for Garamendi, said the commissioner will fight the lawsuit (Sacramento Bee, 12/2).