Risk Management

Anthem Subpoenaed in Insurance Probe

The Connecticut attorney general looks into the health insurer's dealings with insurance brokers.
Stephen GreenOctober 27, 2004

Anthem Inc. has received a subpoena from Connecticut Attorney General Richard Blumenthal, who is investigating how the big health insurer handles its business with brokers, according to Reuters.

The subpoena “just lays out some standard questions about commission and bonus structure,” Anthem spokesman James Kappel told Dow Jones Newswires yesterday. “We plan to reply with the request for information.”

The subpoena was the first that the company has received from any state official investigating the insurance industry, he added. Anthem did not issue a press release or notify the Securities and Exchange Commission about the development in a formal filing. “It’s not a material event for the company,” the spokesman told the wire service.

Blumenthal confirmed that his office issued 35 subpoenas in connection with his probe of insurers and brokers doing business in the state, although he wouldn’t name names, according to Dow Jones. “Our focus is on potential bid-rigging and price-fixing that may stifle competition and raise costs of insurance,” he told the wire service.

Dow Jones said Blumenthal wouldn’t comment on the evidence he has uncovered, “except that there clearly are indications of wrongdoing that is more pervasive and widespread than we would have guessed.”

Although Blumenthal couldn’t say exactly how many other state attorneys general are working on the investigation, he told Dow Jones there are varying degrees of interest, “but it’s probably between five and 10 that have expressed strong interest in becoming involved.”

New York State Attorney General Eliot Spitzer is reportedly looking into the health insurance industry in addition to his more widely reported probes of the property-casualty insurance business.

Last week, Anthem competitors Aetna and Cigna said they received subpoenas from Spitzer, according to Reuters.

Further, The Chubb Corp., a big p/c insurer, said in an 8-K filing that on Oct. 22, it “received interrogatories and a subpoena” seeking information as part of an investigation by the Blumenthal’s office into possible violations of the antitrust laws. It added it intends to cooperate fully with the inquiry.

4 Powerful Communication Strategies for Your Next Board Meeting