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Regulators Issue New Rules to Curb Illegal Health Insurance Cancellations

State insurance regulators have issued a new set of rules aimed at curbing illegal cancellations of individual health policies. Regulators say the practice has been widespread in California. KPBS repo

State insurance regulators have issued a new set of rules aimed at curbing illegal cancellations of individual health policies. Regulators say the practice has been widespread in California. KPBS reporter Kenny Goldberg has more.

The Department of Managed Health Care says the draft rules spell out the procedure insurance companies must follow. Under the regulations, a policy cannot be terminated unless a person intentionally lied on their application.

Jerry Flanagan is with the Foundation for Taxpayer and Consumer Rights. He says the new rules aren't strong enough.

Flanagan : Essentially what we have here, is a kangaroo court operated by the insurance companies, who are both judge and jury of whether you lied on your application, and these insurance companies have a financial motive to find that you lied as many times as possible.

State regulators say they'll audit insurers to make sure companies are following the rules. And regulators say consumers will have the right to appeal cancellations.

Kenny Goldberg, KPBS News.

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