In a countersuit filed on March 22, InsWeb Corp. charges that eHealthInsurance Inc., took actions-including terminating its linking agreement with InsWeb-that were designed to cause InsWeb to be unable to provide a health insurance marketplace.As a result, Gold River, Calif.-based InsWeb claims it is unable to fulfill its contractual obligations to third parties. InsWeb also alleges that eHealthInsurance has been able to steal away a few third-party sites that InsWeb had gathered into its network.
InsWeb maintains "this is merely a step in a continuing scheme by eHealthInsurance to convert InsWeb's network to its own benefit and to exclude InsWeb."
"The notion that eHealthInsurance had a secret scheme to partner with InsWeb for a year, pay InsWeb millions of dollars under the parties' contract, and then terminate that contract is false and is factually absurd," says Bruce Telkamp, general counsel for eHealthInsurance, Sunnyvale, Calif.
Despite the battle, both companies signed significant contracts within weeks of the lawsuits being filed.
In early March, eHealthInsurance partnered with The GE Financial Network (GEFN). eHealthInsurance will offer GEFN customers health insurance through GE Financial's Web site.
Also, InsWeb landed a two-year services agreement in late February with Allstate Insurance Co., Northbrook, Ill. Under the terms, Allstate will market auto, homeowners, renters and condominium insurance products on InsWeb's Web site.
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