Schmidt

In this appeal, we conclude that the Knox-Keene Health Care Service Plan Act of 1975 (Act) (Health & Saf. Code, § 1340 et seq.) and section 1300.46 of title 10 of the California Code of Regulations (hereafter regulation 1300.46) prohibit a broker of health care service plans from rebating commissions to his clients.

Plaintiff James R. Schmidt worked as an independent broker for the health care plans offered by defendants Foundation Health (Foundation) and St. Joseph’s-Omni Health Plan, Inc. (Omni), and received a commission from defendants for the clients he obtained. In an effort to increase his client base, plaintiff offered to rebate his commission to prospective clients. Defendants believed this rebate scheme violated provisions of the Act and an implementing regulation, and terminated their relationships with plaintiff.

Plaintiff filed suit against defendants, alleging numerous causes of action including conspiracy to restrain trade, tortious interference with contract and prospective economic relationships, and slander. Defendants successfully demurred to the slander cause of action as contained in plaintiff’s second amended complaint, and the trial court…