Anthem, WellPoint Note Merger Approval by CDI

November 10, 2004

Anthem Inc. and WellPoint Health Networks Inc. announced that John Garamendi, commissioner of the California Department of Insurance (CDI), has granted his approval for their pending merger.

In July of this year, the companies received approval from California’s Department of Managed Health Care (DMHC) after a several months-long, comprehensive review of the proposed merger. The companies are now communicating with regulators in other states in order to complete the merger as quickly as possible.

“We have worked diligently with Commissioner Garamendi to understand and address his concerns in order to demonstrate that this merger will truly benefit Californians,” said Larry Glasscock, Anthem’s chairman, president and CEO. “Likewise, we look forward to continuing to provide the members in all of our states with the quality health benefits and outstanding service they have come to expect from Anthem and WellPoint.”

“Our agreement with Commissioner Garamendi terminates our litigation in California,” added Glasscock. “Thanks to the work previously done by associates from both Anthem and WellPoint, we are well prepared to quickly and successfully integrate our two organizations.”

“All of us at WellPoint are pleased with the very thorough approach that both DMHC and CDI took to ensure that our merger would serve the best interests of Californians. We now look forward to the successful completion of the merger so that the commitments we made to DMHC Director Ehnes and Commissioner Garamendi can be implemented,” added Leonard Schaeffer, WellPoint’s chairman and CEO.

In working with Commissioner Garamendi, the companies reportedly made a number of commitments designed to address some of the most pressing problems in California’s health care system. The commitments further build upon the agreements negotiated with the DMHC in its approval for the merger earlier this year.

Specifically, in addition to the commitments previously made to the DMHC, Anthem and WellPoint have agreed to allocate an additional $100 million of high-quality portfolio investments through the Investment in a Healthy California Program. These investments are targeted at health care facilities and services in underserved communities over the 20-year life of the program.

Anthem will also contribute $50 million to support community clinics and the training of nurses through California community colleges to address the state’s nursing shortage.

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