New York State
SUPERINTENDENT LEVIN TELLS OXFORD BOARD TO STOP $9 MILLION
SEVERANCE PACKAGE FOR FORMER CHAIRMAN WIGGINS
New York, April 2, 1998
At the direction of Governor George E. Pataki, Superintendent of Insurance Neil D. Levin today sent a letter to Oxfords Board of Directors directing that the company withhold any payments to former Oxford Health Plans chairman Stephen Wiggins.
Governor Pataki expressed serious concerns about a $9 million severance package approved by Oxfords Board for Mr. Wiggins, including payments for membership fees at country clubs.
In his letter to Oxford, the Superintendent told the Board that he is deeply concerned about this package given the financial, management and systems difficulties at Oxford, as well as Oxfords request for substantial rate increases for its most vulnerable subscribers in New York.
Governor Pataki characterized the package as "inappropriate in light of past problems at Oxford and pending applications for rate increases."
The Superintendent directed that such payments be suspended until the Department has a chance to review the details of this package.
A copy of the Superintendents letter follows:
STATE OF NEW YORK
25 BEAVER STREET
NEW YORK, NEW YORK 10004
April 2, 1998
Mr. Fred Nazem,
Oxford Health Plans
800 Connecticut Avenue
Norwalk, CT 06854
Dear Chairman Nazem:
The New York State Insurance Department ("Department") learned yesterday, of the severance package being given to Mr. Stephen Wiggins by Oxford Health Plans, Inc. ("Oxford"). Given the financial, management and systems difficulties at Oxford, Oxfords request for substantial rate increases for its most vulnerable subscribers in New York, and Mr. Wiggins compensation package of thirty million dollars in 1997, these additional payments present significant concerns.
Although we recognize that it is the parent company providing the payment to Mr. Wiggins, we are hereby directing that such payments be suspended until such sufficient assurances can be provided to this Department guaranteeing that the costs of these payments, either directly or indirectly, will not be allocated to the New York subsidiaries, and that the New York subsidiaries have sufficient capital and surplus to resolve their problems and adequately service their current subscribers. We urge Oxford to provide the same assurances to its regulators and subscribers in other states..
Neil D. Levin
Superintendent of Insurance