The South Carolina Supreme Court has ordered an insurance company to pay $10 million for wrongly revoking the insurance policy of a 17-year-old college student after he tested positive for HIV. The court called the 2002 decision by the insurance company “reprehensible.”
That appears to be the most an insurance company has ever been ordered to pay in a case involving the practice known as rescission, in which insurance companies retroactively cancel coverage for policyholders based on alleged misstatements – sometimes right after diagnoses of life-threatening diseases.
The ruling emerges from a conservative Southern state with one of the most pro-business climates in the country. And it comes as progressive Democrats on Capitol Hill are pressing for health care reforms, such as a public insurance option, that reflect wariness about the private insurance industry’s motives.
The Supreme Court on Monday upheld a lower court’s verdict against Fortis Insurance, now known as Assurant. The trial jury had awarded the former college student, Jerome Mitchell, $15 million in punitive damages; the Supreme Court reduced that amount by $5 million.
[From Insurance Company Must Pay $10 Million For Revoking Policy Of Teen With HIV]