When the Arkansas insurance commissioner weighed the merits of a hospital’s billing complaint against United Healthcare, her interactions with one of the nation’s largest health insurers extended far beyond her department’s hearing room.
During months of deliberations, Commissioner Julie Benafield Bowman met repeatedly with United Healthcare lawyers and lobbyists  over lunch and drinks at venues such as the Country Club of Little Rock.
“I had a blast with you Monday night,” Benafield emailed  United Healthcare lawyer Bill Woodyard, himself a former state insurance commissioner. “Thank you so much for entertaining us.”
Commissioner Benafield ultimately decided the case in United Healthcare’s favor — a 2008 ruling that stood to save the company millions of dollars. Nearly two years later, by the time a judge vacated the commissioner’s orders because there was “an appearance of impropriety in the proceedings,” Benafield had moved on: She was working for United Healthcare, having joined at least three of her predecessors representing insurers in Arkansas.
It’s a common career move. An investigation by the Center for Public Integrity  found that half of the 109 insurance commissioners who have left their posts in the last decade have gone on to work for the industry they used to regulate — many leaving before their terms expire. Just two moved into consumer advocacy.
The revolving door swings in the other direction, too. For almost a year, Connecticut’s insurance commissioner was overseeing a merger involving a company where she had been a lobbyist. She recused herself last month amid a state ethics review.
Consumer advocates and some commissioners say the tight bond between regulators and industry — reinforced by campaign contributions, lavish dinners and the prospect of future employment — diminishes consumers’ voices as insurers press rate increases, shape regulations and scuttle investigations.
"It's very difficult at times to take a stand for consumers and have your voice heard," said Sally McCarty, a former Indiana commissioner and retired consumer advocate. "A lot of commissioners don't bother doing that for that reason — and they don't want to alienate the industry. ...Many people consider the job an audition for a better-paying job."
Insurers counter that the industry is highly regulated and their lobbying efforts are key to informing commissioners and other policymakers who oversee a part of the financial sector that touches millions of Americans’ lives.
“It is crucial for commissioners and other state and federal policymakers to understand the products and services we provide to people,” said Jack Dolan, a spokesman for the American Council of Life Insurers. “The information we provide and the perspectives we share must always be credible, trustworthy and follow the letter and spirit of the law.”
The stakes are enormous.
Because Congress has long left regulation of the insurance industry to the states, these little-known regulators, one per state, wield immense power over one of the largest segments of the U.S. economy. Charged chiefly with protecting consumers, commissioners review rate changes, investigate complaints and make sure insurers have enough money to pay claims.
Their decisions impact nearly every American. Most people are required to carry some form of insurance: auto, home, health. And yet, most commissioners operate outside public view, sometimes exempted from disclosure requirements that cover other state officials and often ignored by the decimated statehouse press corps .
'It impresses our clients'
The cozy relationships between regulators and industry were revealed in the Center for Public Integrity’s review of lobbyist reports , regulator financial disclosures, campaign finance records and more than 3,700 pages of emails obtained through open records laws in 13 states.
At least four commissioners had direct financial ties to the industry, with New Jersey’s top regulator selling his insurance stocks  — prohibited investments under state ethics laws — only after an inquiry from the Center for Public Integrity.
Many more have accepted thousands of dollars in trips to lavish conferences sponsored by insurance companies and their trade groups in locales like The Sanctuary Hotel  on Kiawah Island, South Carolina, and the Four Seasons  in Jackson Hole, Wyoming.
Multiple commissioners rely on industry campaign contributions. Over the past decade, insurance companies and their employees were among the top political donors to commissioner candidates in at least six of the 11 states that elect regulators, according to data collected by the National Institute on Money in State Politics . Four of those 11 states ban contributions from the insurance industry.
Above all, there is a steady drumbeat of lobbyists wining and dining commissioners in state capitals. Often, the ones picking up the tab are former insurance commissioners themselves.
In Mississippi, George Dale, who served as commissioner for more than three decades before becoming a lobbyist, represents at least two insurers, including Allstate Corp. Eight years after he left office, department staffers still address him as “Commissioner,” keep him abreast of employees’ birthdays and retirements and share internal reports on legislative developments, according to the documents obtained by the Center for Public Integrity.
“It impresses our clients that we know the commissioner,” Dale wrote to  Insurance Commissioner Mike Chaney after a night out in 2010.
In an interview, Dale said that his close ties with the department were the inevitable result of his 32-year tenure. "They're friends of mine," he said. "If that's wrong, I'm guilty."
Allstate declined to comment.
Emails from other states also show personal relationships between regulators and insurance representatives, who share dinner invitations, family news and friendly sports wagers.
“It gets at the whole integrity of the process,” said Bob Hunter , a former Texas commissioner who runs the insurance program for the advocacy group Consumer Federation of America. “It raises among the public more and more doubt about the honesty of government and about government generally.”
Crossing the line
While several current and former insurance commissioners lament the outsize influence of the industry, they reject the notion that coziness breeds corruption. Instead, they see the close relationship with insurers as critical in a complex, fast-moving industry.
“Access gets you in the door,” said Chaney, the Mississippi commissioner. “But it doesn’t mean you’re going to get any better treatment than anybody else.”
To counter industry influence, the National Association of Insurance Commissioners  pays for a small group of consumer advocates to attend its meetings, where regulators set insurance standards and draft model laws.
“State insurance regulators are committed to their shared dual responsibilities of consumer protection and the regulation of insurance company solvency,” said NAIC President John Huff , who is also director of the Missouri Department of Insurance.
But some commissioners have crossed the line.
In California, a commissioner resigned in 2000 after allegations that he drafted secret settlements with insurance companies that required the firms to contribute to his nonprofit foundations rather than face hundreds of millions of dollars in fines for mishandling claims. In Oklahoma, the top regulator resigned just before his impeachment trial in 2004 and was later convicted of embezzlement and pleaded no contest to accepting bribes from an insurance executive. In New Mexico, the insurance superintendent left office in 2006 after a series of controversies, including intervening in his daughter’s car accident claim to get a larger payout.
The consequences for consumers are even larger today as commissioners have seen their role expand in recent years; they are now the state gatekeepers for Obamacare, interpreting and implementing key portions of the federal health care law.
The regulators are also tasked with reviewing mergers, making sure the deals do not restrict competition and harm consumers. As millions of Americans face rising health care premiums, two such deals now under consideration — Aetna-Humana and Cigna-Anthem — would shrink the major players in U.S. health insurance from five to three.
‘We are in real danger here’
Often underfunded and understaffed, commissioners face a number of political and financial headwinds.
Because most are appointed officials serving at the pleasure of a governor, turnover is high. According to a Center for Public Integrity analysis, the median tenure of a commissioner is less than four years.
On average, NAIC data from last year show 6 percent of the annual revenues collected by insurance departments were spent on regulation — well below the 10 percent that the Consumer Federation of America says is needed to keep pace with insurers. In most cases, the rest of the money is deposited into states’ general funds and used for other government services.
The workload is considerable. At best, when everyone from secretaries to the commissioners is taken into account, each employee of the average department oversaw 14 insurance companies and 1,150 agents.
Consumer advocates say all of this leaves policyholders vulnerable as insurers incorporate more and more personal data — including social media posts — into their assessments and create more complex insurance products.
Life insurance companies, for example, are expected to use new accounting standards next year that will allow them to maintain smaller reserves, a move that will likely boost shareholder dividends. But consumer advocates say that without actuaries and financial experts, insurance departments will be hard-pressed to ensure companies can pay consumers’ claims.
Some say the limited oversight is the result of a lack of resources, but also a lack of political will.
For many states, insurance companies are economic development engines as well as cash cows for state coffers.
In Texas, one of the nation’s largest insurance hubs, the state reaps about $2 billion a year from insurance taxes. That’s more than it collects from levies on natural gas production.
Enforcement can vary widely by state.
California, for example, held a three-hour public hearing on the proposed merger of Aetna and Humana, which would create the second-largest managed care company in the country. The state’s insurance commissioner, Dave Jones, ultimately urged the Justice Department to reject the plan. But at least three other states — Ohio, Kentucky and Connecticut — approved the merger without any hearings and with little public notice of their decisions.
Thirteen states held no hearings of any kind last year, and five states haven’t performed what is called a market conduct exam to probe companies’ sales practices in five years.
Even in Iowa, where insurance is one of the state’s leading industries, regulators were so overwhelmed that they briefly stopped accepting applications of insurance companies seeking to relocate there. In a twist, insurance executive Susan Voss, a former commissioner, pressed the governor and legislature for more funding to buoy regulators.
“We are in real danger here,” Commissioner Nick Gerhart wrote in an email to Voss. “They need to hear that without [a] strong regulator all this falls apart.”
In this year’s budget, the state gave the department funding for 15 new positions.
Of the 50 sitting commissioners, 24 came directly from the insurance industry or had worked for an insurer.
“You get somebody with expertise, and you get someone who is qualified to do the job from day one. This is not an uncomplicated financial service,” said Kathleen Sebelius, a former insurance commissioner and governor of Kansas and the U.S. secretary of health and human services until 2014.
But, she added, there is a fine line between “appropriate expertise and overly cozy” relationships.
“People are supposed to be doing the public’s business and not lining their own pockets or making their own deals for future benefit,” said Sebelius, who declined to accept industry campaign contributions while commissioner.
The Center for Public Integrity found four commissioners who had direct financial ties to the industry, either through insurance stocks, a spouse’s job or a retirement plan from a former employer.
For much of the last year, New Jersey’s Richard Badolato and his spouse held at least $10,000 worth of stock  in two major insurers that his office oversees, a violation of the state’s ethics code.
After an inquiry from the Center for Public Integrity, he got rid of the shares — and all his remaining individual stock holdings “out of an abundance of caution," an insurance department spokesman said on his behalf. Badolato had told ethics investigators that he failed to identify the insurance stocks as prohibited holdings after a broker purchased them on his behalf.
Consumer advocates say that weak ethics laws — and lackluster enforcement — encourage officials to push the boundaries.
“It’s commonly understood there’s no such thing as a conflict of interest,” said Birny Birnbaum, executive director of the Center for Economic Justice , a Texas-based consumer advocacy group.
For example, until recently, Connecticut’s top regulator, Katharine Wade, had been overseeing the merger of healthcare giants Anthem and Cigna, even though she is a former Cigna lobbyist and her husband is a lawyer there. For months, she resisted calls from lawmakers and consumer groups to recuse herself, agreeing to step aside last month after state ethics officials pressed her for financial information to determine how she and her spouse would benefit from the healthcare deal.
Even then, Wade told the state ethics board that she was recusing herself from her office’s review simply because the controversy had “created unwarranted and unfair distractions for the Department.” No conflict of interest exists under Connecticut law, she said, because her husband is not an officer of Cigna and the couple does not own 5 percent or more of the company. Cigna declined to comment.
State ethics officials have lobbied for years to tighten these rules, but the Connecticut General Assembly, comprised of part-time lawmakers with outside employment, has routinely rejected changes.
Some commissioners worry cases like this can corrode public trust.
“We’re our own worst enemy sometimes,” said Chaney, the Mississippi insurance commissioner. “We hold a lot of power, and we have to be extremely careful about how we make decisions because we affect people from the time they are conceived in their mother’s womb and until the time they die and everything in between.”
Consumer advocates also point to Kentucky.
Earlier this year, Republican Gov. Matt Bevin appointed Insurance Commissioner Brian Maynard, a former life insurance executive who was working for the insurance department. Maynard quickly dropped a court case that sought to save a key portion of a consumer-protection law, which forces life insurers to locate and pay beneficiaries when policyholders die.
The action was surprising, given that the state — under the previous Democratic administration — had spent years defending the law and was four days from oral argument before the Kentucky Supreme Court.
Kentucky Attorney General Andy Beshear, a Democrat, called the action “highly unusual” and “reckless,” saying thousands of heirs may be left in the dark about their benefits.
Maynard told the Center for Public Integrity that the state “believed that the statute was not intended to apply retroactively” to policies that predated the 2012 law, the same argument used by some life insurers.
The law’s sponsor in the Legislature and the state’s former insurance commissioner, however, have sharply disputed that interpretation. According to the American Council of Life Insurers , at least 15 states have passed measures that apply to all past and future policies.
Insurance companies, consulting firms and law practices routinely poach commissioners to boost their lobbying and regulatory compliance divisions.
For the firm, there is the promise of access. For the ex-commissioner, there is the promise of a lucrative payday. Although at least 33 states ban former legislators  and sometimes other officials from lobbying their past colleagues during a “cooling-off” period, according to the National Conference of State Legislatures , in many cases, relationships endure and interactions continue.
In Iowa, where the law prohibits insurance commissioners from lobbying for two years after leaving office, emails show Susan Voss began contacting her former office within months of stepping down in 2013, first as a consultant and then as an executive for American Enterprise Group Inc.
She repeatedly asked her successor and his top aides for information about how regulators were tackling insurance matters, both in Iowa and in meetings of the National Association of Insurance Commissioners. Voss even attended breakfast regularly with a deputy commissioner, who she tapped for phone numbers, email addresses and help with federal regulators.
Like other former-commissioners-turned-industry-representatives, she also offered advice and guidance to less experienced staff. The department was just as helpful to her.
In 2014, Voss asked Gerhart’s assistant for five minutes of the commissioner’s time. Within two hours, the commissioner phoned her.
“How was that for efficient,” the assistant wrote back. “You ask, and he calls.”
“Wow! Awesome power!” Voss replied .
In an interview, Gerhart said his office also meets with consumer groups regularly. Still, he said frequent communication with insurers is essential.
“We do meet with industry quite a bit,” he said. “Our job is to really make sure we understand their business and understanding their business is about more than just reviewing their financial books.”
Voss told the Center for Public Integrity that she did not violate the lobbying ban because she did not seek to influence legislation or regulations, the official definition of lobbying under Iowa's laws.
And she added her access had limits: “I might get in the door, but I’m certainly not as successful as people think."
Commissioners’ interactions with insurers extend far beyond the state capitals.
For five days in April, commissioners and their staffs convened for the spring meeting of the National Association of Insurance Commissioners. Gathered at the Sheraton New Orleans Hotel , just steps from the rollicking French Quarter, they were outnumbered by industry lobbyists and other representatives of insurance companies.
Some attendees from the insurance industry wore special NAIC badges featuring an ax symbol to advertise their status as ex-officials who once wielded the regulatory hatchet. While the NAIC declined to disclose a list of those with special credentials, the Center for Public Integrity identified 21 former commissioners from 18 states and the District of Columbia representing insurance interests.
One night, lawyers and lobbyists mingled with regulators at a cocktail reception sponsored by Locke Lord LLP, a law firm with a roster of blue-chip insurance clients. The event at Roux Bistro featured an open bar and buffet stations of crab cakes with roasted corn couscous and Cajun-dusted beef with horseradish cream.
While the NAIC has a conflict of interest policy for commissioners that bans them from accepting meals paid for by insurers at its conferences, such parties are specifically exempted because they are “open to all NAIC meeting attendees.”
The corporate closeness is hardly unusual. Emails obtained by the Center for Public Integrity show companies build relationships with commissioners through dinners year-round, sometimes including the regulators’ family members. But in nearly a dozen states the public may never know: Nine don’t require commissioners to file public disclosure reports, while another two do not consider food or drink for “immediate consumption” a gift.
In 2010, Nebraska Director of Insurance Ann Frohman thanked executives from Physicians Mutual Insurance Co. for a dinner outing during a NAIC meeting, though it’s not clear who paid for it. In turn, the company was effusive in its praise of the Nebraska Department of Insurance.
“I enjoy not only working with the NDOI as our regulators, but having you as friends,” a senior executive at Physicians Mutual wrote in an email. “The NDOI has done a tremendous job in representing the best interests of the insurance industry.”
Commissioner Frohman agreed, in an email chain that also referenced “hilarious” shirts and photos of the evening. “I couldn’t survive the [NAIC] meetings without having this time to look forward to,” she wrote back .
About eight months later, Frohman was working for Physicians Mutual, inviting her former colleagues to dinners and lunches while seeking to influence regulations.
The meals, while critical to building relationships, do not sway regulators’ decisions, Frohman said.
“There are folks in the industry I had dinner with as commissioner that I would not buy peanut butter from and others where there is mutual respect,” she said. “If a commissioner remains in the Ivory Tower and keeps a distance, he or she will be less than effective because work doesn’t stop at 5:00 p.m.”
Given the scarce resources of insurance departments, the industry also seeks access by offering commissioners and their top aides scholarships to attend corporate-sponsored training sessions and conferences.
Each year, the Insurance Regulatory Examiners Society Foundation hosts what it calls “a national school on market regulation,” usually at a luxury hotel in a scenic location. In 2013, the most recent data available, the foundation spent $13,554 on 16 scholarships.
The event is marketed as an educational summit for regulators and insurers alike, featuring panels on the latest hot topics in the insurance world. But the three-day, industry-backed outing also affords insurance companies extraordinary access to regulators. Firms pay as much as $7,500 for special privileges, including a book of 50 drink tickets, attendees’ email addresses and exclusive marketing opportunities. According to the foundation’s website, insurers can sign up for private, 15-minute sessions with “a regulator of your choice.”
This year, the group held its “regulatory roundup” at the Westin in San Antonio, Texas, overlooking the city’s picturesque River Walk. The event featured dinner and drinks for regulators and industry representatives at Howl at the Moon, a nightclub that touts its “signature 86oz buckets of booze.”
The IRES Foundation declined to comment but says on its website that it organizes such events "to promote professionalism and education in the insurance regulatory community and to educate the private sector about state insurance regulation."
A new role
In September 2008, a little more than a week after Benafield rendered her decision on the United Healthcare case in Arkansas, she had lunch with one of the company's lobbyists. According to court records, Benafield asked him if the division of UnitedHealth Group Inc. might be interested in employing her.
The lobbyist passed along Benafield's resume to an executive, saying: “She believes she has contacts among many state insurance commissioners and staff that would be beneficial to an insurer.”
Two months later, she was regulatory affairs director for United Healthcare in Arkansas and Tennessee.
The company declined to comment but has said it did not discuss employment with Benafield until after she had issued her final ruling in the case.
Benafield also declined a request for comment but told Arkansas Business in 2009 that she did nothing wrong.
“No matter how I ruled on anything, this hearing or anything else, during the last year, somebody would have said, ‘She's ruling that way so [she] can get a job,’” Benafield said. “There's no way I could win.”
The Arkansas General Assembly subsequently passed a “revolving door” law, barring former insurance commissioners and other high-ranking officials from lobbying for one year. The measure, which also prohibited ex-regulators from representing companies in cases they oversaw, did not apply to Benafield because it was not retroactive.
Elsewhere, the free flow of commissioners to industry continues.
When Germaine Marks, director of the Arizona Department of Insurance, resigned to take a job with Prudential Financial Inc. last year, lobbyists flooded her inbox.
“I’m sure that your ‘good-byes’ to your staff and colleagues at the ADOI these next two days will be difficult after nearly two decades,” wrote a Farmers Insurance Group lobbyist. “Just reassure them that you will be back to visit in your new role.”
Data reporter Ben Wieder contributed to this story.
An abridged version of this investigation ran in The Washington Post .