Health Net Fined One Million Dollars and a Class Action Suit might be on the way!

DOW JONES NEWSWIRES

Health Net Inc.'s (HNT) Health Net Life Insurance Co. faces a purported class- action lawsuit alleging that the insurer retroactively canceled the policies of more than 1,600 people to save the company more than $35.5 million, according to lawyer William Shernoff.

According to Shernoff, internal company documents show that a Health Net employee was given an incentive-based goal of 15 rescissions a month in 2002.

Shernoff has asked California Insurance Commissioner Steven Poizner to suspend Health Net's license to sell insurance and said he will request that California State Attorney General Jerry Brown consider criminal charges.

Health Net, Woodland Hills, Calif., received a $1 million fine Thursday from the California Department of Managed Health Care for failing to disclose the employee bonus program. The state agency is still investigating the company and further fines are possible.

Health Net wasn't immediately available for comment.

-Melissa Korn; 201-938-5400; AskNewswires@dowjones.com

Tags: Health Insurance, health insurance scam, health insurance law suit, health insurance fines, health insurance class action, health net, California Insurance Commissioner