A California regulator is taking the unprecedented step of ordering PacifiCare Life and Health Insurance to keep $120 million in profits in the state to help pay up to $1 billion in possible fines for mishandling claims of policyholders.
Insurance Commissioner Steve Poizner ordered the insurer to not send its dividends home to its parent company, Minnetonka, Minn.-based UnitedHealth Group, in an administrative order.
Similar warnings have been made informally to insurers in the past, but Poizner’s order marks the first time a formal order to keep dividends has been issued to a health insurer in California. The health insurer faces record fines of nearly $1 billion in fines for 991,936 alleged instances of mishandling insurance claims, according to the Department of Insurance.
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