Insurance Commissioner Jim Poolman on Monday gave formal approval for Blue Cross Blue Shield of North Dakota to refund some of its premium surplus to policyholders.
The Fargo-based health insurer had more than $220 million in reserves at the end of last year. Poolman earlier had suggested the refunds, saying the insurer’s reserves were above target levels.
Attorney General Wayne Stenehjem last month issued an opinion saying it would be legal for the Blues to refund some of the surplus. His opinion was needed because state law prohibits the Blues from paying dividends.
Stenehjem’s opinion that the law was not intended to bar premium refunds to customers cleared the way for the refunds up to $26.6 million, pending Poolman’s formal approval.
Blue Cross Blue Shield has said it hopes to make the refunds by year’s end. The company estimates the refunds will benefit more than 150,000 policyholders, including some employer plans and customers who sign up for health coverage through local banks. For bank depositor policyholders, they should equal about 80 percent of a monthly premium bill.
Blue Cross Blue Shield last week asked Poolman to reconsider a rate increase for its employer group premiums, saying the board approved the $26 million premium refund in September based on “strong assurances” from Poolman that his department would provide a “reasonable evaluation of our rate filings for 2007.”
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