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WYMAN SUES BLUE CROSS/BLUE SHIELD TO RECOVER $270 MILLION PROFIT SURPLUS FOR CONNECTICUT CUSTOMERS

Contact: Steve Jensen
860-702-3308 or 860-702-3301

State Comptroller Nancy Wyman today commenced a class-action lawsuit on behalf of about 700,000 residents insured by Blue Cross/Blue Shield of Connecticut, seeking to force the company to return a $270 million surplus to its customers instead of sending it to corporate headquarters in Indiana.

``That surplus belongs to the people of Connecticut," Wyman said. ``It was created by individuals who pay premiums and by the special treatment and tax breaks this company enjoyed in Connecticut for decades. We want the money to be used as it was promised, for the benefit of the policyholders and the state, not to fill the pockets of the directors of this company. This is a classic example of corporate greed."

In August, Blue Cross/Blue Shield merged with Anthem Insurance Co., of Indiana. Of the 700,000 residents covered by the company, about 110,000 are state employees, retirees and their dependents, for whom Wyman procures and administers medical coverage.

Anthem/Blue Cross wants to transfer the $270 million surplus out of Connecticut, where the company profited from decades of tax breaks and other preferential treatment. Wyman's lawsuit, brought in Hartford Superior Court, seeks a court ruling ordering the company to distribute the surplus to its policyholders through a cash payment, a reduction in premium rates or establishment of a fund for the policyholders.

Wyman said she decided to file a class-action suit to ensure that Connecticut residents insured by the company will receive the vigorous representation they may not be able to afford themselves.

``There are very few policyholders who have the means to speak up against this multi-billion dollar company," Wyman said. ``As an elected official, it is my responsibility to make sure these 700,000 residents are treated fairly."

The lawsuit also alleges that Blue Cross/ Blue Shield and Anthem officials conspired to hide vital financial information from policyholders before the policyholders voted to approve the merger between the two companies this summer.

The suit supplements an administrative appeal Wyman filed in September contesting many terms of the merger approved by the state Department of Insurance. A decision on that appeal is pending.

``Both lawsuits are necessary to fully protect the interests of Connecticut policyholders," Wyman said. ``I want to ensure that even if the merger stands, this enormous profit surplus created in Connecticut will stay in Connecticut."

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For Immediate Release
November 20, 1997

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