State restricts Premera subsidiary

State Insurance Commissioner Mike Kreidler on Wednesday ordered a Washington-licensed, for-profit subsidiary of Premera Blue Cross to stop new sales to Arizona customers, saying nonprofit Premera has infused millions of dollars generated by Washington policyholders into the for-profit.

Washington policyholders will have spent $49 million “footing the bill” for LifeWise Health Plan of Arizona by the end of the year, Kreidler said in a prepared statement.

LifeWise of Arizona serves only that state, and it is a long-term investment expected to be profitable by 2012, according to a company news release. Spokane residents may have LifeWise Washington or Premera Blue Cross policies, a LifeWise spokesman said.

“Also this week, Kreidler fined Ohio-based Progressive Insurance Group more than $150,000 because it “unlawfully calculated and charged incorrect premiums to more than 62,700 Washington policyholders,” according to a news release.

Progressive Classic Insurance Co. and Progressive Northwestern Insurance Co. used unapproved rates to generate premiums for uninsured-motorist bodily injury and property coverage during a seven-month period ending in April 2006, according to the release.

Progressive Max Insurance also was ordered to pay a new fine and half of a prior, suspended fine for using unapproved rates to calculate premiums for 614 policies for a six-month period ending March 2006.