The Arkansas Democrat-Gazette’s Brian Fanney dug into the file today in reporting an Insurance Department reprimand of Carlton Saffa, an aide to Gov. Asa Hutchinson, for inappropriate sales tactics when an agent for Washington National Insurance Company.
An investigator believed customers had been misled into reinvesting proceeds from paid-up policies into higher-cost new policies. The investigation covered 15 complaints.
Saffa ended his working relationship with the insurance company shortly after taking a $90,000-a-year job with the governor in January. He surrendered his license in April, when the investigation was underway.
The letter of reprimand was issued Oct. 16 and posted on the Insurance Department website. It was widely circulated to Little Rock media this week, including by a short-lived Twitter account using “John Dean” as a pseudonym.
Saffa worked on insurance matters for the governor. He has declined comment and so has the governor’s office, beyond confirming that his work has included insurance matters. I have asked if his duties will change in light of this report.
UPDATE: I received this response from J.R. Davis in the governor’s office:
“This was a matter that we reviewed internally and was prior to him becoming an employee in my office. I believe he has handled it responsibly with the Arkansas Insurance Department. Additionally, I have made the decision to make a change in his policy portfolio to different issues other than insurance.”
It is not the first piece of unflattering insurance news related to the Hutchinson era.
Mike Pickens, a former insurance commissioner (and Republican), has been raising complaints about Insurance Commissioner Allen Kerr in the course of defending a client facing regulatory action from the department. Kerr was a sitting legislator when an insurance company terminated him for cause as an agent (in Saffa’s case, his company said he was in good standing). Kerr was accused of understating risks on policies he wrote. This was well-known when Hutchinson gave him the commissioner’s job. The governor has expressed confidence in Kerr.
Early in Kerr’s tenure, his department was cited by the federal government, and agreed to repay $1 million, because it had spent federal money on department operations that was intended only for the health insurance marketplace program.