What it means to truly be an independent insurance agent is under dispute in Iowa this week, after a licensee of the Blue Cross Blue Shield Association was accused of violating state laws against anti-competitive behavior in its actions involving a smaller health insurance company and one of its shared agents.
According to allegations filed with the Iowa Insurance Division, Wellmark Blue Cross & Blue Shield illegally threated to terminate the contract of a prominent independent agent if he served on the board of CoOportunity Health.
CoOportunity said Wellmark is “brazenly violating” the law by using “coercion or intimidation” to interfere with its business.
The business alleges that Jesse Patton, a broker from West Des Moines appointed with both Wellmark and CoOportunity, was elected to CoOportunity’s board after nominating himself to serve.
As president of the Iowa Association of Health Underwriters, Patton is well-known in the state’s insurance community and said he felt serving on CoOportunity’s board did not conflict with his interests as an independent agent.
However, Patton removed his name from the board last week after being tWhat do hreatened with a cancellation on his contact with Wellmark, the Des Moines Register reported.
Wellmark Vice President Laura Jackson told the newspaper that the company did discuss Patton’s candidacy for the CoOportunity board with him, saying it was a conflict of interest for an independent agent, but denied threatening to cancel his contract.
CoOportunity further accused Wellmark of attempting to persuade Patton to join its own board of directors—a position that pays at least $85,000 per year—but both Patton and Jackson deny the conversation.
Jackson did say she would be pleased of Patton joined Wellmark’s board of directors, but insisted she would never put a broker in such a position as to compromise his or her role as an independent advisor.
The Iowa Department of Insurance has agreed to formally investigate the matter.
CoOportunity has also sought to persuade the Polk County attorney’s office to open a criminal investigation into the matter.
What do you think? Is it a conflict of interest for an independent agent to serve on the board of an insurance carrier? Sound off in the comments section below!
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