LA City Attorney Seeks to Stop ‘Junk Insurance’

October 25, 2010

The Los Angeles city attorney has filed a complaint against several insurance companies, alleging they tried to defraud consumers by marketing coverage as “comprehensive” that was actually full of hidden limitations.

The city attorney’s office announced Wednesday that it is filing the enforcement action against what it calls “junk insurance.”

The complaint names California insurers Mega Life and Health Insurance Company and Mid-West National Life Insurance Company of Tennessee, their parent company HealthMarkets Inc., shareholders and affiliated groups.

It seeks an order requiring them to give coverage consistent with promises, an injunction stopping unlawful practices, restitution for victims and civil penalties that could total tens of millions.

A phone message seeking comment from a spokeswoman for HealthMarkets was not immediately returned.

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