Benefits will remain for New West customers under PacificSource
HELENA, Mont. – Commissioner of Securities and Insurance Monica J. Lindeen today approved the bulk reinsurance agreement between New West and Pacific Source, ensuring that New West customers will continue to receive the same benefits through PacificSource until their insurance policies renew.
“This agreement preserves the range of options available to Montanans in our health insurance market,” said Lindeen. “New West customers will keep the same benefits under PacificSource as they had under New West. I look forward to reviewing new products and options for consumers PacificSource will introduce over the coming years. I’ll continue to keep an eye out for consumers as Montana’s health insurance landscape grows and changes.”
Last fall, Oregon-based PacificSource Health Plans negotiated to transfer $25 million in business and approximately 8,600 insured Montanans from New West Health Services. With close to 1,600 people insured by PacificSource in Montana before the transfer, the deal represents a significant increase in the company’s stake in Montana. PacificSource also sells health insurance products in Oregon, Washington, and Idaho.
On Feb. 7, Lindeen’s office held a hearing where representatives from New West and PacificSource laid out the agreement and made their case for approval. At that hearing, the Commissioner’s chief financial examiner testified that the agreement would not pose a risk to either company’s financial stability, nor would it reduce service to transferred policyholders. No testimony opposing the deal was submitted to the Commissioner.
Lindeen’s approval will take effect on Feb. 29. Documentation of the completed bulk reinsurance must be submitted to Lindeen’s office before March 9, 2012.
Lindeen’s approval marks the final regulatory step for New West as it sells or transfers its non-Medicare, major medical insurance business. New West previously reached an agreement to sell a portion of its business to Blue Cross Blue Shield of Montana. That deal, however, did not require Lindeen’s approval to move forward. New West will continue to market Medicare Advantage and supplemental Medicare insurance plans in Montana.
Lindeen reminded Montanans about the services her office can provide during the transition.
“It’s confusing enough when you switch health insurers, but when your health insurer switches on you, you’re bound to have a lot of questions and concerns,” said Lindeen. “My top priority is consumer protection, and my office has insurance experts on hand to answer any questions that might arise from this agreement.”