Anthem Sues Calif. Insurance Commissioner

Garamendi rejected the BC Life acquisition application in July.

California managed care regulators already have approved the transfer of WellPoint's California managed care holdings. BC Life represents about 10% of WellPoint's California holdings. If Anthem succeeds at acquiring WellPoint, BC Life would make up only 4% of the combined company.

Anthem could acquire WellPoint's California managed care operations and let BC Life become a separate company, experts say.

Garamendi says he rejected the BC Life acquisition application because the Anthem-WellPoint deal would force policyholders to fund $3.4 billion in debt.

"I have also found that this transaction would be prejudicial, unfair and unreasonable to the California policyholders, who would pay, in part, for the $200 million to $600 million in compensation that would be given to [WellPoint] executives," Garamendi says in a statement defending his BC Life ruling.