L.A. City Attorney Informs Blue Cross of Wider Investigation
The Los Angeles City Attorney's office has expanded its probe of insurance policy cancellations to include Blue Cross of California and will investigate whether the insurer's practices violate state law, the Los Angeles Times reports.
Assistant City Attorney James Colbert sent a letter last week to Blue Cross advising the insurer that a special litigation unit lead by Colbert will investigate Blue Cross' cancellation policies and decide if the insurer is complying with the state's unfair competition and false advertising laws.
In a news release last month, Blue Cross said that in 2006 it created a simpler application for individual coverage, formed a new committee to review canceled policies and enhanced training for its employees.
Colbert's letter also advised Blue Cross that the California Supreme Court has held that "such statements are a form of commercial speech subject to the prohibitions against deceptive advertising" under two state laws.
If Blue Cross does not adequately support the claims it made in the news release, Colbert said the city attorney's office could presume that the claims were false or misleading and issue a consumer alert or file a lawsuit (Girion, Los Angeles Times, 3/5).