NU Online News Service, June 11, 2004, 3:15 p.m. EDT – Aetna Inc., Hartford, and CIGNA Corp., Philadelphia, say the New York attorney general has sent them subpoenas regarding the issue of broker compensation.[@@]
“The subpoena is part of an industrywide inquiry that began earlier this year,” Aetna says in a statement about the subpoena. “The company intends to cooperate fully with the attorney general’s inquiry.”
CIGNA also confirmed that it has received a subpoena. “We are cooperating with the attorney general’s office,” CIGNA spokesman Wendell Potter says.
A subpoena is a notice that requires the recipient to supply information or to appear to testify in court.
New York Attorney General Eliot Spitzer has been looking into the possibility that undisclosed or poorly disclosed payments from insurers to brokers might be affecting brokers’ coverage recommendations to customers.
Aetna and CIGNA, which now focus mainly on selling health insurance and other employee benefits, are not saying what products are involved in the broker compensation investigation, but most observers are assuming that Spitzer has started looking at compensation for benefits sales.
One large multiline insurer that sells benefits, MetLife Inc., New York, received a broker compensation subpoena from Spitzer’s office today, and another multiline insurer with a large benefits operation, Hartford Financial Services Group Inc., Hartford, received a broker compensation subpoena Thursday.
Until today, the Spitzer broker compensation subpoenas had gone out to insurance brokers and property-casualty insurers or multiline insurers with large property-casualty operations. Some observers had speculated that the investigation might be focusing mainly on sales of property-casualty insurance.