Originally the commission ordered Southern Cross to sell all the policies as a condition of approving its third application to acquire Aetna.
However, the High Court reversed that ruling in a decision earlier this year.
The commission is appealing that decision which allows Southern Cross to keep hold of 40,000 health policies written by Aetna. The polices are worth about $70 million.
The commission originally argued that Southern Cross would have a dominant market position if it kept the policies. However, the court ruled otherwise, saying the barriers to entry in the market were low and there was plenty of competition.
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