Health Net has agreed with California department of insurance that they will pay $3.6 million in penalties and $14 million in refund for medical charges .Both of the departments have agreed to a settlement of about $25 million over handling allegations of unfair claims and annual health coverage.

California Department of Insurance said in a news release, they would also offer replacement healthcare coverage to926 people whose policies were rescinded by Woodland Hills a California based company since 2004.  

Health Net Chief Executive Jaay Gellert said in a statement, “While we do not necessarily agree with the California Department of Insurance's allegations, we do believe it is time to move forward and make sure these affected individuals can obtain coverage.”  

Health Net agreed to change its application form, agent training, under process and customer notifications. They also agreed to establish a third-party review process for future decisions on rescinding coverage.
 
If Health Net did not correct all deficiencies, it could be fined an additional $3.6 million.

Insurance Commissioner Steve Poizner said in a news release, “During the settlement negotiations, Health Net was highly cooperative, and I believe their broad-based changes to underwriting and rescission practices will serve as a model and example to other health insurers,”  

Now two agencies together regulate health insurance in California. The insurer has been facing many lawsuits, fines and penalties for thousands of medical claims.