Calif. Proposes Tougher Rescission Rules

Law360, New York (June 4, 2009, 12:00 AM EDT) -- In response to a slew of lawsuits and enforcement actions claiming the state's largest health insurance companies improperly revoked insurance coverage, California's Department of Insurance has proposed new regulations that would clamp down on confusing policy applications and illegal rescissions.

California's first steps toward clarifying rescission laws, the proposed regulations would ensure that health insurance companies perform underwriting before approving applications and would make it more difficult for them to rescind coverage once it is approved, Insurance Commissioner Steve Poizner announced Wednesday.

"These regulations deliver a...
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