INDIANAPOLIS, Aug. 3 /PRNewswire-FirstCall/ -- Anthem, Inc. today filed a lawsuit against the California Insurance Commissioner in the Superior Court of the State of California for the County of Los Angeles.
The suit seeks to set aside the Commissioner's decision to disapprove Anthem's application to acquire control of BC Life & Health Insurance Company in connection with the proposed merger of WellPoint Health Networks Inc. with Anthem. The suit also requests the Court to declare that Anthem's application to acquire control of BC Life satisfied all the legal standards for approval and enjoin the Commissioner from blocking the completion of the merger between Anthem and WellPoint. BC Life, a WellPoint subsidiary, would represent approximately 4% of the combined revenues of the merged companies.
"The Commissioner is required to follow California law in making his decision and he failed to do that," said David R. Frick, chief legal officer of Anthem, Inc. "That is why we have unfortunately had to file this lawsuit."
"Filing this lawsuit is something we did not want to do," said Larry C. Glasscock, chairman, president and chief executive officer of Anthem, Inc. "However, we genuinely feel we have met all the legal requirements necessary for approval of the merger."
"The Commissioner's denial of the merger blocks Anthem's voluntary commitment that will generate as much as $450 million of investments over a 20-year period aimed at enhancing the availability of health care facilities and services in underserved California communities. The Insurance Commissioner has gone beyond the scope of authority granted to him under California law in denying our merger and in doing so he has hurt the very people he states he is trying to help," added Frick.
The proposed merger of Anthem and WellPoint has already been reviewed and approved by regulators in Texas, Illinois, Delaware, Virginia, Georgia, Missouri, Oklahoma, West Virginia, Wisconsin and Puerto Rico. Each of those regulators applied substantially identical standards contained in laws adopted by virtually all states, including California. The proposed merger has also been reviewed by the California Attorney General, the United States Department of Justice and the Federal Trade Commission. It has been approved by the California Department of Managed Health Care (DMHC), which regulates approximately 90% of WellPoint's California business and is responsible for ensuring that covered Californians have appropriate access to quality health care, and unanimously approved by the directors of the Blue Cross Blue Shield Association. In addition, shareholders of both companies, by a vote of 97%, overwhelmingly approved the merger in separate shareholder meetings earlier this year.
"We have met all of the standards necessary for approval by the California Department of Insurance, just as we have met the demanding standards of the DMHC and the standards of regulators in every one of the 10 other jurisdictions where approval was required. Each of those other regulators, after a careful and thorough review, has ruled in favor of this merger," said Frick. "The Commissioner's decision is unlawful and we are asking the court to overturn his action and assure approval for the merger."
A copy of Anthem's complaint is available at http://www.anthem.com/ in the section titled Press Room.
Anthem, Inc. is an Indiana-domiciled publicly traded company that, through its subsidiary companies, provides health care benefits to more than 12.6 million people. Anthem is the fourth largest publicly traded health benefits company in the United States and an independent licensee of the Blue Cross Blue Shield Association. Anthem is the Blue Cross and Blue Shield licensee for Indiana, Kentucky, Ohio, Connecticut, New Hampshire, Colorado, Nevada, Maine and Virginia, excluding the Northern Virginia suburbs of Washington, D.C. Anthem had assets of $13.7 billion as of June 30, 2004 and full year 2003 revenue of almost $16.8 billion. More information about Anthem is available at http://www.anthem.com/ .
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
This press release contains certain forward-looking information about Anthem, Inc. ("Anthem") that is intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Words such as "expect(s)", "feel(s)", "believe(s)", "will", "may", "anticipate(s)" and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of Anthem, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include: those discussed and identified in public filings with the U.S. Securities and Exchange Commission ("SEC") made by Anthem; trends in health care costs and utilization rates; our ability to secure sufficient premium rate increases; competitor pricing below market trends of increasing costs; increased government regulation of health benefits and managed care; significant acquisitions or divestitures by major competitors; introduction and utilization of new prescription drugs and technology; a downgrade in our financial strength ratings; litigation targeted at health benefits companies; our ability to contract with providers consistent with past practice; our ability to consummate Anthem's merger with WellPoint Health Networks Inc., to achieve expected synergies and operating efficiencies in the merger within the expected time-frames or at all and to successfully integrate our operations; such integration may be more difficult, time-consuming or costly than expected; revenues following the transaction may be lower than expected; operating costs, customer loss and business disruption, including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers, may be greater than expected following the transaction; the regulatory approvals required for the transaction may not be obtained on the terms expected or on the anticipated schedule; our ability to meet expectations regarding the timing, completion and accounting and tax treatments of the transaction and the value of the transaction consideration; future bio-terrorist activity or other potential public health epidemics; and general economic downturns. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Anthem does not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures in Anthem's various SEC reports, including but not limited to its Annual Report on Form 10-K for the year ended December 31, 2003 and Quarterly Reports on Form 10-Q for the reporting periods of 2004.