Insurer to Pay $10M for Rescission Based on HIV

     (CN) – An insurance company’s “reprehensible” decision to rescind a South Carolina man’s coverage after he tested positive for HIV warrants a $10 million punitive damage award, the state Supreme Court ruled.

     Jerome Mitchell applied for health insurance with Fortis Insurance Co. in 2001 at the age of 17. Fortis issued him a policy after he stated that he had never been treated for an immune deficiency.
     One year later, Mitchell tried to donate blood to the Red Cross, which informed Mitchell that he was HIV-positive. Mitchell’s doctor confirmed this finding.
     Fortis investigated Mitchell’s medical history and rescinded his policy, stating that Mitchell had misrepresented his HIV-positive status.
     Mitchell sued for breach of contract and bad faith and presented evidence that he would die of AIDS within four years without medical treatment.
     The trial court ruled in Mitchell’s favor, awarding him $186,000 in actual damages and $15 million in punitive damages.
     The state high court upheld the awards, but reduced the punitive damage award to $10 million based on the ratio of the projected $1 million cost of Mitchell’s treatment.
     “We find ample support in the record that Fortis’ conduct was reprehensible … Fortis demonstrated an indifference to Mitchell’s life and a reckless disregard to his health and safety,” Justice Toal wrote.

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