Posted On: March 29, 2007, 7:19 pm CDT

Posted By: ken

The CA Insurance Commission has on their website that $8M fine against UnumProvident over mishandling of disability claims--article dated 3 October 2005, by John Garamendi. Also attached to that is the LA Times article dated 3 October 2005 by Peter Gosselin. It was for a few thousand claims, but the DMHC believes Blue Cross has also done thousands of illegal post claims underwriting---I think that is why they are still investigating after 11 months as Terence pointed out. They believe that Blue Cross did at least 1000 a year for 10 years--minimum---articles call it the "tip of the iceberg." When you see 90 random samples all come back breaking state law, you know almost all the rest will be the same---and that is thousands of illegal policy cancelations--just like Unumprovident.

Blue Cross' conduct was more egregious and they are "thumbing their nose" even today and with $3.01B profit last year, and up 156% since 2004 (see CNN money.com or Fortune) they will get hit with a fine above $8M.

Did you know $3.01B is a profit of $5,500 each minute and if youinclude their stock price going up 15% then it is $10,000 a minute. They can buy a brand new Mustang car every 2 minutes for a whole year---profit. That is 365 days, and 24 hours per day and 7 days a week.

An $8M fine is 6 hours of lost profit in a year for Blue Cross. That $1M fine by the DMHC was 1.5 hours lost profit.