Cigna merger poses landmine for Malloy’s insurance commissioner

September 21, 2015

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The nexus between Gov. Dannel P. Malloy’s insurance commissioner and Cigna Corp., which is seeking the state’s regulatory approval for its mega-merger with Anthem, is more extensive than officials have let on amid mounting pressure for her to recuse herself.

While it’s widely known that Katharine “Katie” Wade was previously a Cigna vice president and that her husband is now an associate chief counsel of the Bloomfield-based insurance giant, Hearst Connecticut Media has learned that Wade’s mother, Susanne Lanza, was also on the company’s payroll.

Lanza was tasked with individual and small group compliance while at Cigna, public records show. She also served as an officer of both state and federal trade groups, including as executive director of the Connecticut Health Council.

So far, Wade has balked at calls for her to remove herself from an oversight role in Anthem’s $48 billion acquisition of Cigna, saying she wants to wait until the companies file their formal application with the state.

That’s opened her and Malloy, who is close to Wade’s father-in-law, Jim Wade, a major Democratic fundraiser, up to criticism.

“We want to have confidence that the process is fair and impartial,” said state Sen. Kevin Kelly, R-Stratford, ranking member of the General Assembly’s Insurance and Real Estate Committee. “We should try to avoid the appearance of a conflict of interest. I would hope that she would be able to figure that out on her own.”

Malloy’s office referred questions on the matter to the Connecticut Insurance Department, which re-issued a statement from Wade on her ties to Cigna, where she was a lobbyist. It would not make Wade, 49, available for an interview.

“I do understand, however, the need to address any concerns that may arise from the appearance of a conflict,” Wade said. “It has been nearly two years since I was an employee at Cigna and I have no financial interest in the company. I am prepared to recuse myself from any matter involving Cigna with which I had an active involvement. This merger is not a matter in which I was involved in any way.”

Multiple state and federal agencies must sign off on the merger of the two health care behemoths, which insure 53 million people combined. They include the Federal Trade Commission and the state attorney general office’s.

Not helping Wade’s position is that George Jepsen, Connecticut’s attorney general, has already recused himself from the process because his wife works for Cigna.

It could be weeks or months until state insurance regulators receive the tandem application.

“I think she’s making a tragic mistake to even go that far,” said David Cadden, a professor emeritus in the School of Business at Quinnipiac University in Hamden. “It’s clear that there’s a personal and familial connection with one of the two players. One could assume that she could make an independent decision, but it would always be tainted. In her own best interests, I would imagine it would be an immediate no-brainer to recuse herself.”

Wade said in her statement that her husband, Michael T. Wade, is not an officer or executive of Cigna and that the company has “firewalled” him off from working on any issue that could come before the state insurance agency.

The statement did not address Wade’s mother’s connection to Cigna, which insurance regulators say wasn’t hidden and is in the public domain.

Wade was unanimously confirmed in April by the Legislature, but not before being grilled about her and her husband’s ties to Cigna.

Malloy nominated Wade for the $160,000-a-year post in March, passing over the insurance agency’s acting commissioner and former deputy, Anne Melissa Dowling, who was named to the top regulatory post in Illinois in June.

Dowling’s office did not respond to a request for comment Thursday. Neither did Cigna or Wade’s father-in-law, a prominent Hartford lawyer who has contributed more than $13,000 to state Democrats dating back to the late 1990s.