State Insurance Commissioner Steve Poizner said he would seek a $12.6 million fine against the insurer, the Los Angeles Times reported Thursday.

He called the allegations "serious violations that completely undermine the public's trust in our healthcare delivery system and are potentially devastating to patients."

State insurance and HMO regulators have been critical of the way health plans cancel individual policies after receiving claims for costly medical care.

Blue Shield called the charges "grossly unfair" and vowed to vigorously contest them and the proposed fine.