Hamm releases Blue Cross Blue Shield target exam report (CLICK HERE TO READ REPORT)
Posted on 9/8/2009
BISMARCK, N.D.-North Dakota Insurance Commissioner Adam Hamm today released the Report of Target Financial Examination (Report) of Noridian Mutual Insurance Company, doing business as Blue Cross Blue Shield of North Dakota (BCBS).
The Report is being released after the Insurance Department received written authorization from BCBS to publish the Report prior to the date required by state law.
The Report includes findings of excessive expenses paid with policyholders' dollars. Some of the main areas of concern include compensation, travel policies, investments and severance packages.
"The bottom line is that health care premiums are for health care, they are not for expensive retirement parties, corporate jets, risky hotel investments or a compensation structure that rewards senior management regardless of BCBS's financial performance," Hamm said.
Hamm has directed the company to address these matters immediately. In the directive letter that accompanies the Report, Hamm outlined that as a nonprofit mutual insurance company, BCBS's Board of Directors and management are obligated to act in the best interest of BCBS members in providing cost effective health care benefits to its members.
"I direct the Board to adopt and implement stricter standards in all matters of BCBS operations, human resources and financial management to ensure that the organization is managed for the good of its members," Hamm said.
BCBS is required to file a written explanation within 30 days outlining the actions the company will take to adopt and implement changes.
The Insurance Department used a team of financial insurance examiners to conduct the exam. It covered a period from Jan. 1, 2004 through March 31, 2009 and took the Department 14 weeks to complete. Much of this time was spent in Fargo gathering information from company executives.