Highmark Inc. is suing the Pennsylvania Department of Insurance, claiming the department is trying to challenge Highmark's right to operate under the Blue Cross-Blue Shield brand, and alleging that the department has "overreached its legal authority" to investigate the state's Blues-affiliated insurers.

The lawsuit, which marks an intensification of the ill will between the Pittsburgh-based insurer and the department that regulates it, was filed Tuesday in state Commonwealth Court, and "is a necessary next step in protecting our brand," Highmark said in a news release.

In July 2009, the Insurance Department announced that it had launched an inquiry of Highmark and the rest of the state's Blues -- Philadelphia's Independence Blue Cross, Blue Cross of Northeastern Pennsylvania and Harrisburg's Capital BlueCross ­-- to determine if they are "engaged in anti-competitive or unfair trade practices in violation of the law."

"There's smoke out there," Insurance Commissioner Joel Ario said at the time. "The question is whether there is fire."

Highmark says there is neither smoke nor fire, as evidenced by the fact that the U.S. Department of Justice twice signed off on the proposed megamerger between Highmark and IBC, which would have created one of the largest health insurers in the United States.

Mr. Ario, in an e-mailed statement, told the Post-Gazette the inquiry was getting uncomfortable for the Blues, but that it had nothing to do with trademarks:

"We do believe the exam is within our purview, scope and authority -- or we would not have undertaken it. It is an in-depth study of competition in our health care marketplace. We are deeply concerned that this lawsuit comes on the heels of our attempts to investigate some specific allegations of anti-competitive behavior -- issues having nothing to do with licensing.

These have to do with their treatment of brokers and unfair pricing of insurance."

The insurance department announced its probe of the Blues -- which is still ongoing -- just a few months after the department helped to spike the proposed Highmark-IBC merger.

One of the reasons that the Insurance Department wasn't willing to endorse the Highmark-IBC merger was that the department wanted the merged company to relinquish one of its Blues trademarks, freeing it to be used by another competitor -- and that's something neither Highmark nor IBC was willing to do.

Though Mr. Ario said the issues now being examined have "nothing to do with licensing," Highmark's press office said "it is apparent that the Insurance Department intends to challenge the licenses that Highmark holds to use the Blue Cross and Blue Shield brands, and to deprive Highmark of the benefit of the brands, which Highmark has promoted for more than 70 years."

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