DETROIT, January 14, 2009 – A ruling by Ingham County Circuit Judge Paula Manderfield yesterday ended the Attorney General’s lawsuit challenging Blue Cross Blue Shield of Michigan's business relationship and financial dealings with its wholly-owned Lansing, Mich.-based subsidiary, Accident Fund Insurance Company of America, when it confirmed Accident Fund's legal ability to own workers compensation or disability insurance subsidiaries.

The ruling validates Accident Fund’s ability to own and operate subsidiary workers’ compensation insurance companies and paves the way for Accident Fund to continue to grow its national business, bringing jobs and economic growth to Michigan, its home base.

Tuesday's ruling by Judge Manderfield dismissed the only remaining count of three counts in the Michigan Attorney General’s lawsuit against BCBSM. It means that all three counts filed by Attorney General Mike Cox against BCBSM have been successfully defended in court.

“We are pleased with Judge Manderfield’s ruling,” said Lisa DeMoss, BCBSM senior vice president and general counsel. “It confirms the legality of Accident Fund’s ownership of subsidiaries and effectively ends the lawsuit by Attorney General Cox against the Blues.”

The Michigan Attorney General announced the lawsuit on July 2, 2008. A count alleging violations of BCBSM's original 1994 purchase agreement governing the sale of Accident Fund by the state to BCBSM was dismissed by the court on October 6. Another count, which questioned a capital transfer from BCBSM to Accident Fund was dismissed and remanded to the Michigan Insurance Commissioner, a move requested by BCBSM. On January 13, the court dismissed the remaining count, confirming the legality of the Accident Fund's ownership of subsidiary companies.

In her ruling, Judge Paula Manderfield stated that the statute did not bar Accident Fund from owning or controlling insurance companies and did not prevent Blue Cross from indirectly purchasing or owning insurance companies. She wrote in her ruling that “this decision resolves the last pending claim and closes this case.”

“Accident Fund couldn’t be more pleased with the court’s ruling,” said Liz Haar, president and CEO of Accident Fund. “The court’s affirmation of our ability to own subsidiaries allows us to continue our national expansion, providing superior service for employers and compassionate care for their employees.”

Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association.

Accident Fund Insurance Company of America is the nation’s 11th largest workers compensation insurer and is rated “A” (Excellent) by A.M. Best.

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