News: Australian watchdog files suit against health insurer Medibank

MELBOURNE, June 16 (Reuters) - Australia's consumer watchdog has launched a suit in the Federal Court against the country's largest private health insurer, Medibank Private Ltd (MPL), claiming it misled customers about a decision to limit benefits for pathology and radiology services while in hospital.

The Australian Competition and Consumer Commission (ACCC) said Medibank failed to give advance notice about the change in policy, fearing its members might opt to switch to other providers.

Medibank faces potential maximum penalties of A$1.1 million ($816,000) per breach of Australian consumer law, an ACCC spokeswoman said.

Officials at Medibank could not immediately be reached for comment. ($1 = 1.3483 Australian dollars)