California Court of Appeal Affirms Insurers' Right to Rescind

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California’s Second District Court of Appeal last week issued an opinion that contains two important rulings on first-impression issues of major significance to health insurers. In Nieto v. Blue Shield of California Life & Health Insurance Company, __ Cal. App. 4th __, 2010 Cal. App. LEXIS 50 (Jan. 19, 2010), in which Manatt represented the defendant insurer, Division Two reaffirmed traditional principles of insurance and contract law, holding that an insurer is entitled to rescind a policy based on the insured’s material misrepresentations in the application, regardless of whether the insured had intentionally deceived the company.

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