FOR IMMEDIATE RELEASE

NAIC DETAILS STATE EFFORTS TO COMBAT RESCISSIONS ABUSES

Federal Reform Proposals Would Supplement Ongoing State Efforts

WASHINGTON, D.C. (July 27, 2009) - The National Association of Insurance Commissioners (NAIC) is taking steps to prevent abuses associated with rescissions of medical coverage for policyholders.

In a letter to the chair and ranking member of the House Energy and Commerce Subcommittee on Oversight and Investigation, state insurance commissioners said they are undertaking a detailed examination of the practice and have tasked a group of regulators with developing procedures for external review of rescissions. 

"Given the particularly harmful nature of rescissions, state regulators recognize that even one confirmed abuse is too many," said Sandy Praeger, Kansas Insurance Commissioner and Chair of the NAIC Health Insurance and Managed Care Committee. "If Congress enacts legislation pairing guaranteed issue rights with a requirement for all individuals to obtain health insurance coverage, rescission abuses will become a thing of the past."

The NAIC has already begun an analysis of complaints from consumers nationwide related to rescissions and is moving forward with initiatives to promote state efforts to enhance consumer protections. 

In the letter, regulators also pointed to California as a recent example. After imposing a one million dollar fine against a major carrier for rescissions abuses, the state forced the company to reimburse individuals $14 million in medical expenses and required it to offer coverage to 2,300 individuals whose policies were rescinded. The state also compelled other carriers to accept similar settlements.
 
Click HERE to view full text of letter to Congress.