What Do You Mean It's Not Covered: Questionable Sales Tactics

The 1992 Colorado appeal court case -- Life Investors Ins. Co. of America v. Bruce Smith -- dealt with some unsavoryhealth insurance sales practices. Bruce Smith was the insurance commissioner for Colorado at the time of the lawsuits, which originated in a consumer-protection action. In the summer of 1982, Charles Cozza went to work for a construction company. After he'd started his job, the construction company discontinued its group health insurance coverage for employees. At the request of the employer an insurance agent, John Yannacito, spoke to the company's employees -- including Cozza -- about the availability of individual health insurance. Yannacito talked with Cozza about the possibility of obtaining medical/hospitalization insurance for Cozza and his wife Kim, who was then about six months pregnant. After some initial discussions, Yannacito contacted Life Investors' general agent in Colorado, Jerry Campbell, about insuring the Cozzas. He told Campbell that Kim Cozza was six months pregnant. Campbell in turn called Life Investors' home office and spoke with an employee about obtaining health insurance for the Cozzas. Campbell didn't say anything about Kim Cozza's pregnancy. However, Campbell went ahead and told Yannacito that health insurance was available for the Cozzas despite Kim's pregnancy. Yannacito relayed the message to the Cozzas.