California insurance commissioner wants Cigna-Anthem blocked

(Reuters) — California's insurance commissioner on Thursday urged the U.S. Department of Justice to block health insurer Anthem Inc.'s acquisition of Cigna Corp., saying he is concerned it will raise premiums in the state.

Dave Jones, who as insurance commissioner in California does not have authority to approve the deal, said he believes his recommendation will hold weight with U.S. antitrust regulators examining the acquisition.

Anthem announced plans to buy Cigna last summer. Recently Anthem said it believed the Justice Department was examining the employer-based health insurance market in which the insurer acts as the health plan administrator.

In California, Anthem and Cigna would control 61% of the administrative services market alone, Jones said during a call with reporters.

"California has a highly consolidated insurance market today. This merger with Anthem and Cigna will only make that situation worse," Jones said. He said there were no divestitures that could improve the situation.

Shares of Cigna rose 0.5% to $127.16. Anthem added 1.1% to $132.03.