Dive Brief:
- The Center of Public Integrity is highlighting data that it suggests raise concerns around the close relationships and intermixing of roles between insurance industry executives and the state commissioners charged with regulating them.
- The door between the two sides swings both ways, the organization illustrates. Of the 50 current state commissioners, 24 held previous roles in the insurance industry. Meanwhile, of the 109 commissioners that have left their posts during the past 10 years, half went on to take jobs in the insurance industry, often before their terms had expired.
- Another top point in the report was insurers and their employees were found to be among the top political donors to state commissioner candidates over the last 10 years in at least six of the 11 states where regulators are elected.
Dive Insight:
The findings raise questions around how much state insurance commissions really represent the consumers of their state as opposed to the industry where they are likely to have ongoing, close ties that can involve future job prospects, political donations, friendships, and other perks from "wining and dining" to conference trips.
If there is a conflict of interest, it matters now more than ever because the stakes have never been higher, the Center noted. While state commissioners tend to operate behind the scenes, their power has grown immense as they implement federal healthcare law, review mergers, approve premiums, investigate complaints, and ensure that payers remain solvent to cover claims of their members.
In one very pertinent recent example, Connecticut insurance commissioner Katharine Wade was heading a multi-state review of the proposed merger between Anthem and Cigna, one of two possible mega-mergers along with Aetna and Humana, that could reshape the entire industry landscape nationwide. Wade's involvement was questioned for months because she previously lobbied for Cigna and her husband remains a lawyer there, but she only recused herself in last month after ongoing pressure and questions around how she would benefit from the deal.
The Center concedes that often the cross-over is a matter of appropriate expertise, but suggests it too often crosses the line–and that even when it doesn't, the appearance of conflict of interest risks erosion of public trust. It further suggests that sometimes such coziness is not lost on state administrations, which may see insurers as "cash cows" and key players in state economic development.