The Association of California Life and Health Insurance Companies has filed suit in California seeking to scuttle the state's new anti-rescission law, which took effect Aug. 18.
"These regulations are unnecessary and will impose new costs, inconvenience and privacy intrusions on consumers," said spokesman Richard Wiebe.
Wiebe pointed to federal healthcare reform legislation, which will take effect Sept. 23, which limits rescission to cases of fraud or intentional material misrepresentation.
"Health insurers in the individual market have already instituted new standards, which include a clear explanation of underwriting requirements and independent, external reviews of rescissions," he said. "Those new processes have been memorialized in documents submitted to the California Department of Insurance and are being followed without the need for more regulations."
The California State Superior Court in Sacramento will address the lawsuit on Dec. 10.
Wiebe noted that the decision to file the lawsuit came after "careful consideration" by the ACLHIC's 38 member companies.
"Every issue raised in the lawsuit was discussed with the department at various stages of the rulemaking process and in good faith discussions with department staff," he said. "ACLHIC took this action when the regulations failed to address those concerns."
Yani Kazanis, a spokesman for the California Department of Insurance, said the department is unable to comment while the case is being reviewed. He reiterated that Insurance Commissioner Steve Poizner is "strongly against" the lawsuit.
Until the lawsuit is decided, health insurance companies are complying with the regulations, Wiebe said.