Ingham Circuit Court Agrees with Blue Cross Blue Shield of Michigan On Two Counts of Attorney General Lawsuit
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DETROIT, October 7, 2008 - A ruling by Ingham County Circuit Court Judge Paula Manderfield today validates arguments by Blue Cross Blue Shield of Michigan that the Michigan Insurance Commissioner should determine the appropriateness of a $125 million capital transfer from Blue Cross to its Accident Fund Insurance Company of America subsidiary.
The transaction was fully disclosed last year when Accident Fund filed a disclosure form with the Office of Financial and Insurance Regulation. In addition to the regulatory approval, the Insurance Commissioner has previously conveyed to the Michigan Legislature that the transaction was proper. The Attorney General's office also was notified in advance of the transaction last year and no concerns were expressed.
Judge Manderfield also dismissed a second count in the Michigan Attorney General's lawsuit, alleging violations of BCBSM’s original purchase agreement governing the State of Michigan’s 1994 sale of Accident Fund to the Blues.
A third count – whether AFICA may own subsidiary companies – was remanded for a continued legal hearing before Judge Manderfield, and was not dismissed as BCBSM requested when motions were filed with the court this past summer.
“Blue Cross has said consistently that our transfer of capital to our Accident Fund subsidiary was lawful,” said Lisa DeMoss, senior vice president and chief counsel for BCBSM. “We are pleased that the court has agreed with our position on the majority of the complaint and look forward to a successful conclusion to the legal process that allows Accident Fund to continue to grow and return good jobs to the Michigan economy.”
Blue Cross Blue Shield of Michigan is nonprofit and an independent licensee of the Blue Cross and Blue Shield Association.
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