EHealthInsurance Sues InsWeb

Online health insurance marketplace eHealthInsurance is suing InsWeb, claiming the Sacramento, Calif.-based insurance aggregator was furnishing “illegitimate” referrals for health insurance.

Meanwhile, InsWeb has temporarily suspended online health insurance quoting. According to InsWeb, the two companies signed a two-year online distribution agreement in April, 2000 making eHealthInsurance the exclusive provider of individual and small-group health as well as Medicare supplement insurance quotes through a co-branded Web site.

InsWeb discontinued the operation of its own online health-insurance marketplace as a result of that agreement. The lawsuit, filed in the U.S. District Court in San Jose, seeks to recover money paid to InsWeb for “non bona fide traffic” and other remedies.

No hearing date has been set.