Conn. Chief Hears No Complaints of Rigged Bids; Defends Role in Balancing Industry, Consumer Needs

Despite charges of bid-rigging and conflicts of interest against the insurance industry, Connecticut Insurance Commissioner Susan F. Cogswell said she has not found corruption in Connecticut.

Cogswell said she isn’t looking for wrongdoing because she has not received any complaints about broker commissions or fraud, despite widening probes. Instead, she said her role is to work with other regulators drawing up requirements for disclosing compensation paid to agents and brokers.

Cogswell’s approach contrasts with that of New York Attorney General Eliot Spitzer and Connecticut Attorney General Richard Blumenthal.

Spitzer has sued two insurance brokers, implicated several insurers and had some insurance executives arrested. He promises more.

The lawsuits accuse brokers of steering customers to insurers who paid the best bonus commissions. These commissions are paid to brokers and typically are based on the volume and profitability of the business placed with an insurer.

Connecticut-based companies such as The Hartford Financial Services Group, Aetna, and CIGNA are among the insurers implicated in the suits.

Cogswell said that before the antitrust and fraud allegations surfaced in October with Spitzer’s first lawsuit she believed the investigations focused on inadequate disclosure of commissions.

Tom Bivona, president of the Auto Body Association of Connecticut, told The Hartford Courant he believes the industry is too comfortable with Cogswell and the state agency she heads.

“I believe they’re biased toward the industry,” said Bivona, whose association has been fighting with the state insurance agency over how insurers pay body shops and steer policyholders to certain repairers. The association has urged Gov. M. Jodi Rell to fire Cogswell from the $117,669-a-year position.

Cogswell, 51, who left her last job in the insurance industry 11 years ago, said her work as a state regulator requires her to perform a “balancing act” between consumers and industry interests.

Cogswell said she has helped win passage of pro-consumer laws, some of which insurers opposed. The legislation included department oversight of companies subcontracted by insurers to manage prescription drug, mental health and other benefits.

Another new law raises the caps on potential life insurance payments by a state guaranty fund when an insurer fails.

She disputes accusations that her department’s funding by insurers, hiring of examiners with an insurance background or herown work for two insurers years ago has led to industry favoritism.

“How do you know enough about insurance to regulate it if you haven’t had some experience?” Cogswell asked. ‘”I do what I think is fair for the companies and the consumers.”

J. Robert Hunter, insurance director for the Consumer Federation of America and a former Texas insurance commissioner, said Cogswell is “middle of the road.”

“She doesn’t stand out as being particularly bad, but she doesn’t stand out as being particularly good,” he said.

Cogswell’s supporters praise her for treating insurers and consumers fairly during her four-year tenure. Her department has fined companies and agents for various missteps and recovered millions of dollars for consumers in coverage disputes.

“She understands the complexity of insurance issues and is very creative in identifying methods and solutions to insurance concerns,” said M. Diane Koken, Pennsylvania insurance commissioner and president of the National Association of Insurance Commissioners.

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Topics Carriers Agencies Connecticut