This is a picture of Connecticut Insurance Commissioner Katharine L. Wade.
Insurance Commissioner Katharine Wade. Credit: Arielle Levin Becker / The CT Mirror
This is a picture of Connecticut Insurance Commissioner Katharine L. Wade.
Connecticut Insurance Commissioner Katharine L. Wade. Credit: Arielle Levin Becker / The CT Mirror

The Office of State Ethics is not calling for Insurance Commissioner Katharine L. Wade to recuse herself from overseeing her agency’s review of Anthem’s proposal to buy Cigna, where Wade previously worked and her husband serves as an attorney.

But Executive Director Carol Carson said the office has raised concerns.

“There may be ways that Commissioner Wade can act before the matter comes before her to prevent any violations under the code,” Carson said.

The office’s concerns were similar to those raised in a 1996 case involving then-Insurance Commissioner George Reider, who sought to serve as a hearing officer for the proposed acquisition of a portion of Aetna, his former employer.

Reider had Aetna stock options that were due to vest around the time he would likely decide on the proposed deal, and ethics officials determined that would pose a conflict of interest. Reider then agreed to postpone his vesting rights, which ethics officials said eliminated the conflict. Officials had previously determined that he did not have a conflict of interest because he had placed his Aetna interests in a blind trust. Nonetheless, Reider ultimately recused himself from the matter.

Carson said the office has given Wade guidance based on the Reider case.

“Her facts are a little bit different, but that’s the closest thing we have,” Carson said. “When possible, when we’re providing somebody with advice from the staff, we rely on previous precedent.”

Carson added that while Wade could seek additional information from the ethics office as a decision on the proposal gets closer, “We’re considering this matter closed.”

“We did not conclude that Ms. Wade should recuse herself, but we discussed that as an option,” Carson said. “What we discussed was her set of facts and what the commission has said in the past so that she would have the guidance going forward.”

Wade previously divested her Cigna stock and placed her and her husband’s assets in a blind trust. But her husband, an associate chief counsel at Cigna, has unvested shares of Cigna stock granted as part of an employee compensation plan, which she has said would be put in a blind trust when vested. Wade’s husband also participates in Cigna’s pension plan and 401(k) plan.

Wade declined to comment Thursday through a spokeswoman, who said there is “nothing new to add.”

Wade’s decision not to step aside from the department’s review of the high-profile Anthem-Cigna deal – one of two pending proposals involving major health insurers – has drawn criticism from some lawmakers and editorial boards, and at least one ethics complaint, filed by a Washington D.C. group.

In September, Wade outlined her reasons for not recusing herself in a 6-page letter to Carson.

Among the reasons: Anthem – a company with which Wade has no association – would be the applicant in the case, not Cigna. The factors that must go into the department’s decision are spelled out in law. The application will be evaluated by the department’s staff, and an independent economist will evaluate market competition issues.

Wade wrote that she planned to appoint a hearing officer to oversee the public hearing on the proposal and issue recommendations about the ruling.

Wade – who worked at Cigna from 1992 to 2013, serving as vice president of public policy, government affairs and U.S. compliance – also wrote that she does not have a “substantial conflict” under law, and pointed to the steps she and her husband have taken to separate their financial interests from the company, including transferring the balances of her Cigna retirement plans to another company. Cigna had “firewalled/recused” her husband from matters involving the Connecticut Insurance Department, she added.

Republican legislators have called repeatedly for Wade to recuse herself, suggesting that not doing so could undermine public trust in the department’s action on the proposal.

During an October forum with insurance department officials, Rep. Brenda Kupchick, R-Fairfield, said she’d heard concerns from the public.

“I realize that legally it’s probably appropriate for you to remain involved in it, but what about public perception?” Kupchick asked. “Why wouldn’t the commissioner step aside so at least the public felt more comfortable?”

“My husband and I have taken extraordinary measures related to that,” Wade said. “I think that I have a job and a responsibility. There’s a law to follow and I believe that I can act fairly and objectively and in the public interest.”

“I believe that I can do my job and that my former employment or my husband’s employment is not part of that evaluation,” she added.

Later that morning, Sen. Kevin Kelly, R-Stratford, the top Republican Senator on the legislature’s Insurance and Real Estate Committee, pointed out that a previous commissioner – Reider – had recused himself in a similar situation.

But Wade said the facts were different because Reider wanted to serve as the hearing officer, a role she said she would not play.

Kelly said Thursday that while Wade drew a distinction between her situation and Reider’s, he doesn’t see them as sufficiently different. He said he had questions about the terms of Wade’s blind trust, how many unvested Cigna shares her husband had and whether her husband’s pension benefits would be affected by the Anthem deal.

“I would just want to make sure that the process isn’t encumbered by any of those interests,” he said.

Arielle Levin Becker covered health care for The Connecticut Mirror. She previously worked for The Hartford Courant, most recently as its health reporter, and has also covered small towns, courts and education in Connecticut and New Jersey. She was a finalist in 2009 for the prestigious Livingston Award for Young Journalists, a recipient of a Knight Science Journalism Fellowship and the third-place winner in 2013 for an in-depth piece on caregivers from the National Association of Health Journalists. She is a 2004 graduate of Yale University.

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