WellPoint finance chief is ousted

The sudden departure of David C. Colby, 53, a highly regarded executive within the managed-care industry and a darling of Wall Street, shocked investors and led to a 3.5% decline in the company's stock.

Colby, who was based in Thousand Oaks for years and still owns property in Southern California, was a key player in the merger that made Blue Cross of California, the state's largest health insurer, a part of Indianapolis-based WellPoint.

Colby resigned late Wednesday, days after concerns were raised about his personal conduct, the company said. The two top executives of WellPoint, in concert with its board of directors, asked an outside law firm to investigate the concerns upon learning of them, a spokeswoman said.

Based on that investigation, the board concluded that Colby had violated WellPoint's code of conduct and asked him to step down. He was immediately replaced by Wayne S. DeVeydt, who had served as chief accounting officer.

WellPoint officials declined to detail the nature of the allegations or circumstances that led to Colby's departure. In its news release, WellPoint said the probe "did not reveal illegal conduct, and the policy violations were in no way related to the business of WellPoint."

Colby could not be reached for comment. The company repossessed his corporate BlackBerry and several home telephone numbers associated with him either were no longer in service or rang unanswered.

WellPoint, one of the nation's largest health insurers, provides coverage for more than 7 million California residents through Blue Cross of California and Blue Cross Life & Health. Its California operations have come under harsh criticism recently for allegedly trying to boost the bottom line by dumping policyholders after they've submitted claims for costly medical care.

Also, last week, the California Department of Managed Health Care, which oversees HMOs in the state, said it was investigating a $950-million payment Blue Cross of California made to its corporate parent. Cindy Ehnes, the department's director, described the payment as excessive and said she was concerned that it might violate an agreement the company made to reinvest the bulk of premium revenue on medical care in the state.