CVS Sued by Investor Over Health-Care Benefits Unit Profits (1)

CVS Health Corp. was sued by a shareholder who alleges the company overstated the profitability of its Health Care Benefits segment.

Insurance premiums paid by customers are a significant portion of the segment’s revenue, according to a complaint filed Friday in the US District Court for the Southern District of New York.

But CVS failed to disclose to shareholders that the internal forecasts it used to determine premiums weren’t effective at accounting for medical cost trends and health-care utilization patterns, the suit said.

“Contrary to Defendants’ assurances, the revenues generated from the Company’s other primary segments were insufficient to offset ...