Outgoing California Insurance Commissioner Steve Poizner is not returning gently to the private sector: he's blocked PacifiCare Life & Health Insurance Co. from paying a $120 million dividend to its parent company UnitedHealth Group (NYSE: UNH).
Poizner, who will be stepping down from his elected post on Jan. 3 due to state-mandated term limits, said PacifiCare should not pay the dividend to United because the plan may have to use the funds to pay penalties related to mishandling patient claims. PacifiCare is currently facing allegations that it violated state laws nearly one million times. Each violation carries penalties of up to $5,000 if involuntary and up to $10,000 if willful.
"Nobody knows what the outcome of the enforcement action will be," Poizner said. "But it is entirely possible that allowing United to siphon off $120 million would enable them to turn penalties into profits. My order simply requires that the company keep the money where it would be available to satisfy any order that is issued."
Poizner claimed his agency investigated PacifiCare after it received floods of consumer and provider complaints not long after it was acquired by UnitedHealth in 2005.
- read the Sacramento Business Journal article
- read Poizner's press release