California regulators to audit health insurers

By Adam Tanner and Lisa Baertlein

SAN FRANCISCO/LOS ANGELES (Reuters) - California's insurance commissioner said on Tuesday he would audit the state's leading health insurers as regulators pursue more than $1 billion in penalties related to alleged claims violations at UnitedHealth Group Inc's PacifiCare unit.

"I have decided today to launch audits of all the eight major health insurance companies here in California in 2008. We will be closely examining the practices of all the health insurance companies in California," Steve Poizner, the state's insurance commissioner, said at a press conference in San Francisco.

Poizner declined to name the companies that would be audited.

California's Department of Insurance said on Tuesday it is seeking penalties of up to $1.3 billion related to PacifiCare's handling of medical claims.

The state's Department of Managed Health Care is levying an additional fine of $3.5 million against the insurer.

"It turns out that United/PacifiCare stands out of the crowd as the company where we have received the vast majority of complaints," said Poizner, who said his department has also received complaints about other insurers.

"I don't believe the health care system is totally broken in California. I think most health care companies in California pay bills on time and do the right thing," he said.