ANSWERS FOR CUSTOMERS

Health insurance plans statewide have agreed to better comply with a law requiring them to answer coverage questions posed by prospective customers.

Twenty-one health plans agreed to the settlement after an undercover investigation by state Attorney General Eliot Spitzer found many refused to answer basic questions by consumers. Mr. Spitzer’s staff asked health insurers about fundamental coverage, including whether the plans covered surgery for Crohn’s disease or the cost of a diabetes insulin device, Mr. Spitzer said.

Mr. Spitzer said the settlement obligates the companies to provide clear information that helps consumers make decisions in choosing a health plan and obtaining necessary care.

In varying degrees, the plans failed to adhere to a state law requiring the information be provided. Mr. Spitzer sent five letters to each plan requesting information on whether they would cover the conditions specified by the staffers posing as prospective customers.

The health plans promised to respond better to requests from prospective customers about “clinical review data.” That’s information required to be released by state law that consumers can use to consider the merits of a health insurance policy.

– Associated Press

AMERICAN DEFICIT GROWS

The American trade gap shrank in December and the number of Americans filing first-time jobless claims unexpectedly fell to a four-year low last week, supporting the view the Federal Reserve will keep raising interest rates.

The trade deficit fell 4.9% to $56.4 billion in December from November’s record $59.3 billion, the Commerce Department said yesterday in Washington. Initial unemployment claims fell by 13,000 last week to 303,000 instead of rising as forecast, according to Labor Department figures in Washington.

The deficit for all of 2004 grew 24% to a record $617.7 billion, with more than a quarter of that with China. U.S. consumer demand for foreign-made cars, clothes and electronics, along with relatively slow growth in regions such as Europe and Japan, is keeping the trade gap wide. Non-petroleum imports rose 1.8% to a record $113.8 billion in December.

– Bloomberg News

COOKING BOOKS CITED

The former finance chief of World-Com testified yesterday that the company called off 2001 merger talks with Verizon after he and the CEO, Bernard Ebbers, worried Verizon officials would discover WorldCom’s cooked books.

Scott Sullivan testified there were concerns that Verizon Communications Inc. would uncover the fraud during a process called due diligence, in which companies considering a merger examine each others books.

“I said to Bernie, if we get to the next step with Verizon where we start to exchange nonpublic information, the details of our financial statements, I have concerns … because of the adjustments we have made,” Mr. Sullivan testified.

“He said, you’re right,” Mr. Sullivan continued, referring to Mr. Ebbers. “This probably isn’t a good time to be talking to Verizon anyhow because our stock price isn’t where it needs to be.”

WorldCom and Sprint had a potential merger voided by the Justice Department in 2000, but the talks with Verizon came in 2001, when World-Com’s $11 billion accounting fraud was well under way.

– Associated Press