Insurer political contributions have surfaced as an issue in the New Jersey governor’s race, with Democrats attacking Republican standard-bearer Douglas Forrester for use of funds stemming from his ownership of a Washington captive insurer.[@@]
At issue are a variety of New Jersey state laws, including Section 34-2a of the state’s election statutes, part of the criminal law, which outlaws contributions by insurance corporations. The measure was enacted in 1911, when a slew of reform bills were passed to halt the influence of election spending by a variety of industries.
Today’s Democratic attack came not from Forrester’s opponent in the governor’s race==U.S. Sen. Jon Corzine==but from a leader in the Democratic-controlled Assembly, who called for an investigation and hearing concerning Forrester’s business dealings.
Forrester has a 51% interest in Heartland Fidelity Inc., a pharmacy benefits captive, and Democrats are contending that his ownership means his use of personal monies to fund his campaign is illegal.
A spokesman for Heartland, Peter McDonough, says that the company is chartered in Washington, that the company’s premiums are collected there and that the company is regulated by the Washington Department of Insurance, Securities and Banking.
“Our lawyers have reviewed this [contribution question] and there is frankly no issue,” declares McDonough, who says that a letter had been sent to the New Jersey Department of Insurance and Banking seeking an advisory opinion, which the company expects will support the findings of its attorneys.
Heartland’s position was attacked by New Jersey Assemblyman Neil Cohen, D-Union, N.J., who is deputy majority leader as well as the chairman of the state Assembly Financial Institutions and Insurance Committee.
Cohen announced that he had written to Donald Bryant, commissioner of the New Jersey Department of Banking and Insurance, asking Bryant to hold a formal investigation and public hearing.
According to Cohen’s reading of the law, the state of license or domicile is irrelevant. “If you are doing business in the state, then you are subject to the law,” Cohen says.
Forrester is the owner of Benecard, which, according to McDonough, manages prescription purchasing and dispensing fees for self-insureds and organization pharmaceutical plans and also offers fully-funded plans with a fixed limit.