E-mails Suggest Georgia Insurance Chief Oxendine Had Interest in Probe

By | February 8, 2010

Georgia Insurance Department staffers raised questions about an investigation into an Iowa-based insurer and noted Commissioner John Oxendine’s “personal interest” in the complaint against the company filed by a doctor who later became a major campaign donor, according to e-mails obtained by The Associated Press.

Dr. Jeffrey Gallups of Atlanta filed the complaint against Indianapolis Life Insurance Co. in February 2006. State records show that he and his wife, Nancy, later donated $50,000 to Oxendine who is now running for governor in the Republican primary.

A few months after the complaint was filed with the insurance department, some staffers questioned the merits of pursuing the matter, according to the emails obtained under Georgia’s open records act.

In one email, department investigator Charlie Parr noted Gallups was pursuing a separate legal claim against Indianapolis Life, alleging the company made false promises about the policies he purchased. Court documents show Gallups was seeking to recoup premiums worth $2.1 million plus interest, taxes and penalties.

“(W)e typically stay out of cases involving attorneys and lawsuits, but this case is different because of Commissioner Oxendine’s personal interest,” Parr wrote in the April 7, 2006, email.

Parr also noted Oxendine was “staying close on this one.”

In a response later that day, the department’s assistant director of life and health insurance questioned the merits of the complaint.

“Right now I’m finding it hard to blame the insurer,” Tom Carswell said in his email to Parr.

The department initially pursued mediation with Indianapolis Life but eventually opened a market conduct probe, which could result in hefty fines against the insurer. Department spokesman Glenn Allen declined to give the date when the probe began, but said it is ongoing.

Allen also declined comment on the staff e-mails. Oxendine, through Allen, also declined comment.

Months after the department’s investigation began, contributions began pouring in from Gallups to Oxendine. Gallups and his wife Nancy have contributed $50,000 to Oxendine since 2006. Gallups also bankrolled a 2007 trip by the insurance commissioner and his wife to the Oscars in Los Angeles.

Oxendine has said he reimbursed Gallups for the Oscar trip but declined to provide proof.

Oxendine told The Associated Press in December his office instigated the probe of Indianapolis Life after receiving “several, probably five or six” complaints from Georgia consumers wronged by the company.

But the records provided to The Associated Press following a request for all complaints related to Indianapolis Life revealed only the Gallups’ complaint dated Feb. 12, 2006.

Court records show that Gallups is a plaintiff in a lawsuit filed by John and Catherine Phillips against Indianapolis Life in October 2006. Gallups joined as a plaintiff a month after the Phillips couple filed the complaint. The lawsuit is still pending.

Oxendine also said in December that Gallups was referred to him for help by the office of U.S. Rep. Tom Price. In a Feb. 23 e-mail, Oxendine’s then-secretary Vonnie Stewart called Gallups a friend of Oxendine’s.

Brendan Buck, a spokesman for Price, said the congressman’s office could not find a record of having referred Gallups to Oxendine. But Buck said he could not say for certain that the referral had not taken place.

Email traffic shows Oxendine remained interested in the case. Several times he asked staff for updates. The file was labeled a “hot file” by staff. The emails do not show, and officials would not say, what prompted the staff to continue with the investigation. The term “hot file” was not explained.

In an email response to The Associated Press, Allen said, “I’m sorry, but the department has no further comment on this story.”

Gallups did not return phone calls left at his Alpharetta medical offices seeking comment.

In his Feb. 12, 2006, complaint to Oxendine, Gallups said the Indianapolis Life policies he purchased never delivered the tax benefits the insurer promised. He said he was led to believe the employer contributions to the plan would be tax deductible when, in fact, that was prohibited by the Internal Revenue Service.

“I would very much appreciate your inquiry into ILIC’s practices in the state of Georgia as their actions may have imposed similar hardship on other Georgians,” Gallups wrote.

Indianapolis Life spokeswoman Catherine Huggins denied any wrongdoing. She declined to comment on the department’s emails.

Topics Georgia

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