The insurance firm at the center of Tuesday’s comptroller report that alleged the George Norcross-founded company has violated disclosure laws and improperly influenced public contracting processes.
Acting Comptroller Kevin Walsh said Conner Strong & Buckelew and affiliated firms steered public contracts toward themselves via conflicts of interest. A spokesperson for Norcross, a Democratic South Jersey power broker, called the report politically motivated and vehemently denied wrongdoing.
Conner Strong & Buckelew and PERMA, the two companies at the center of the report, struck back on Wednesday. In a statement, the companies accused the comptroller of bullying and intimidation, breaching legal protections, deceptive practices, and obstructing the procurement of contracts during the investigation.
“The OSC’s report falsely claims the Funds operate with little oversight, insulting the work of volunteer Fund Commissioners and exposing the OSC’s bias,” the companies said. “What began as a routine review of RFPs for TPA services secretly morphed into a full-scale fishing expedition, complete with fabricated interpretations of state law.”
The companies said they are demanding that the governor appoint a special counsel “to review and investigate the missteps and heavy handed actions” of the comptroller. They also asked the Legislature to “rein in this rogue agency.”
“As the State Health Benefit Plans collapse, the OSC has instead sought fit to attack a solution that has proven to be successful for over 3 decades. As you will see, the OSC does not understand what Funds do. Their positions are oftentimes at odds with current law, inserting personal preference where State statute should apply,” the companies said.
Conner Strong & Buckelew is one of the country’s 20 largest insurance brokerage firms. The comptroller’s office said the findings came after a routine review of HIF procurement proposals. The HIFs at the center of the investigation represent some 40,000 local government employees and about 109,700 total enrollees.
The report says municipalities in the state are allowed to form health insurance funds (HIFs) to provide health insurance to employees and pool risk across a whole region to lower costs. The report found Conner Strong & Buckelew and its “alter ego,” PERMA, “improperly gained control” over HIFs’ contracting processes, allegedly competing for and winning the same government contracts they helped write.
“CSB and PERMA purport to be separate, independent entities linked only by a parent company. CSB generally serves as program manager, acting as broker and underwriter for insurance funds, while PERMA is contracted as the administrator, managing day-to-day operations for HIFs. … [The report] found, however, CSB and PERMA function as one entity, with PERMA under CSB’s supervision, sharing leadership and employees,” the report’s announcement states.
