2017 The Al Neuharth Innovation in Investigative Journalism Award, Small Newsroom winner

Drinks, Dinners, Junkets and Jobs

How the Insurance Industry Courts State Commissioners

About the Project

The world of insurance regulation is largely ignored and unpublicized, yet these hugely powerful state offices impact nearly every American by determining the rates they pay for auto, home and health insurance. An investigation by the Center for Public Integrity’s Michael J. Mishak uncovered the cozy relationships between state insurance commissioners and the industry they regulate.

The project documented the extent of the revolving door where jobs are sought over lunches and dinners while commissioners are still in office. It mapped the financial ties regulators have to the insurers they oversee while their government offices are underfunded and understaffed. And, it showed how these tight bonds diminish consumers’ voices as insurers press rate increases, shape regulations and scuttle investigations.

The project found:

  • Half of the 109 insurance commissioners who have left their posts in the last decade have gone on to work for the insurance industry — many leaving before their terms expire. Just two moved into consumer advocacy.
  • Emails obtained through open records laws in 13 states show friendly — and often personal — relationships between regulators and insurers, accented by dinner invitations, family news and friendly sports wagers.
  • Industry groups pay for commissioners to attend lavish conferences at luxury resorts in scenic locations, such as Jackson Hole, Wyo.
  • In 2015, 6 percent of the annual revenues collected by insurance departments was spent on regulation, well below the 10 percent that the Consumer Federation of America says is needed to keep pace with insurers. At best, each employee of the average department oversaw 14 insurance companies and 1,150 agents.
  • At least four sitting commissioners had direct financial ties to the industry, with New Jersey’s top regulator selling his insurance stocks only after an inquiry from the Center for Public Integrity.
  • The insurance industry pumped more than $6 million into political efforts aimed at a dozen 2016 elections: five races for insurance commissioner and seven gubernatorial races in states where governors have the power to appoint their state’s insurance regulator.

The project provided resources for others to shine a light on their state commissioners. It included a digital library with the most recent financial disclosures for 41 insurance commissioners from around the country — the first of its kind to be made publicly available. It also highlighted metrics on each state’s staffing and funding of their insurance oversight departments. The Center for Public Integrity shared the findings with more than 200 state government reporters and editors around the country so they could augment their own reporting.

The work prompted immediate reactions after the first installment appeared on the front page of The Washington Post. It was cited widely by other news sources, including Politico, the Hartford Courant and St. Louis Post-Dispatch. The Des Moines Register wrote an editorial calling on the Iowa Legislature to tighten conflict of interest laws there in response to the work.

We appreciate your consideration of this in-depth reporting on the insurance industry’s close ties to these immensely powerful yet little-known regulators.