California Rescission Battle Now in Court

A health insurer uses a rescission to rescind, or take back, a health insurance policy that it says was issued because an applicant concealed relevant information when applying for coverage.

Poizner has accused health insurers of using rescissions to rescind policies issued to individuals who had made innocent mistakes on applications or left out information that was not relevant to their current health status.

In regulations that were set to take effect Aug. 18, Poizner has required insurers to start investigations of possible omissions of material information from health insurance applications within 15 days of learning of the omissions; to complete investigations within 90 days; to send an investigation target a notice about the investigation every 30 days; and to send the target a written notice about the final determination within 7 days of concluding the investigation.