With the recent discovery of 732 violations of California claims handling laws against Anthem Blue Cross, the insurer’s parent company says it is taking the matter “very seriously” and will address all the issues identified by regulators.

Steve Poizner

On Feb. 22, California Insurance Commissioner Steve Poizner announced that a review of consumer complaints against Anthem’s claims handling practices from 2006 to 2009 resulted in the 732 violations, including 277 violations of failure to pay claims in 30 days.

In a 17-page statement of charges, the California Department of Insurance announced it will hold a hearing on the matter for Anthem to plead its case. Anthem could face a maximum penalty for each violation of $10,000, if the action was found to be willful, meaning the insurer could be facing a multi-million dollar fine.

Kristin Binns, a spokesman for Anthem parent company WellPoint, told IFAwebnews.com that the company takes the issues raised by Poizner “very seriously.

“As the largest insurer in California, our responsibility is to pay the many millions of claims on behalf of our members each year fairly, fully, and promptly,” Binns said in a statement. “While this review represents a small fraction of those claims it is nonetheless very important to us to make sure we take any corrective action that may be necessary.”

She added that WellPoint looks forward to receiving the specifics from the CDI’s investigation and working with its staff “to resolve these issues to his satisfaction and in the best interest of our members.”

In addition to the failure to pay claims within 30 days violations, the CDI also discovered 178 miscellaneous delays and other claims handling violations, 143 violations of Anthem’s failure to respond to regulators in a reasonable time to investigate complaints and 66 violations of misrepresenting facts of policy provisions to policyholders. The remaining violations were for failure to pay interest on unreimbursed claims, unreasonably low settlement offers and failure to pay or contest a claim within 30 days.

“When consumers pay their premiums every month, they expect insurance companies to uphold their part of bargain and pay claims quickly, correctly and comply with all other legal requirements,” Poizner said in a statement. “Our investigation has revealed more than 700 instances where Anthem Blue Cross has violated the state’s claims handling laws. From a failure to respond when the Department of Insurance requested information to investigate complaints to misrepresenting the facts to consumers, these are serious violations and if they are proven in the enforcement action, Anthem Blue Cross will be held liable for them.”

No date has been selected for the hearing.

Anthem Blue Cross recently filed a request in California to increase its rates for individuals by up to 39%, which it then delayed, allowing regulators time to review the request.