Vermont insurance regulators have concluded an executive compensation investigation by ordering a nonprofit health insurer to give $3 million in refunds to subscribers.

Blue Cross and Blue Shield of Vermont, Berlin, Vt., paid the company’s former chief executive officer, William Milnes Jr., about $7 million around the time he retired in 2008 and during the previous year, according to officials at the Vermont Department of Banking, Insurance, Securities and Health Care Administration.

Milnes supporters say he brought the company back from the brink of bankruptcy, and Vermont Business Magazine has described him as an executive who “saved Blues.”

Vermont regulators found that Vermont Blue overpaid Milnes because it used compensation data from bigger plans to set Milnes’ compensation.

Vermont Blue has entered into a stipulation and agreed to accept the idea that it must pay $3 million back to subscribers, according to Paulette Thabault, the Vermont insurance commissioner.

The company also has agreed to continue previously adopted efforts to reduce executive compensation and lower administrative costs and to take new steps to contain costs, Thabault says.

Milnes could not immediately be reached for comment.

Vermont Blue President Don George says the company accepts Thabault’s findings and is satisfied with the executive compensation agreement.

“We are particularly pleased that the commissioner accepted our proposal to address the state’s concerns by providing our customers with some needed premium relief, and that the agreement recognizes other significant cost saving measures that we have implemented over the last two years,” George says.