Investigation into insurance companies’ purchase of ‘Healthy Holly’ books will ‘probably’ expand, Redmer says

April 05-- Apr. 5--Maryland Insurance Administrator Al Redmer said Thursday that he's likely to expand his investigation of insurers involved in donations or sales of Mayor Catherine Pugh's self-published "Healthy Holly" books.

The Maryland Insurance Administration -- which regulates all insurers in the state -- has launched a review of the three insurers that have publicly acknowledged donating funds directly to Healthy Holly LLC or to Associated Black Charities for "Healthy Holly" books.

"We are doing a targeted market conduct exam of, at this point, Carefirst, Kaiser and the Maryland Automobile Insurance Fund," Redmer said.

Redmer noted the investigation will concern the insurers, not non-profits affilated with them that are permitted to make charitable contributions.

Coverage of University of Maryland Medical System board deals and Mayor Pugh's 'Healthy Holly' books --

But Redmer said the investigation could be expanded to include others as his agency uncovers more information.

"We're probably going to investigate more than just three," Redmer said when asked by The Baltimore Sun whether Kelly & Associates Insurance Group would also be examined. "Every investigation we do is to determine whether Maryland insurance laws or regulations have been violated."

The Sun reported Monday that Kaiser Permanente paid Pugh more than $100,000 for 20,000 books -- during a period when the company was seeking a lucrative contract to provide health benefits to city employees -- and CareFirst BlueCross BlueShield said it donated $14,500 to Associated Black Charities to buy 2,000 books. The Maryland Automobile Insurance Fund, the quasi-public company created by the Maryland General Assembly for hard-to-insure drivers, also gave a $7,500 donation in 2012 to then state-Sen. Catherine Pugh's Healthy Holly book company, shortly before she successfully sponsored legislation supported by the company.

Those sales were in addition to Pugh's no-bid deal with the University of Maryland Medical System, which paid her $500,000 for books at a time when Pugh sat on the UMMS board. Not all of the books were printed, and Pugh has returned some of the money.

Former Del. Pat McDonough, a Baltimore County Republican and Redmer's GOP primary opponent for Baltimore County executive last year, questioned Thursday why Redmer also wasn't investigating Kelly & Associates Insurance Group, the insurance company founded by former Sen. Francis X. Kelly.

Kelly and two of his sons have taken voluntary leaves of absence from the boards of six UMMS-affiliated organizations amid a continuing controversy at the hospital network.

The Kellys' Baltimore County business has done millions of dollars in business with the hospitals. Such deals between UMMS' volunteer board members and their companies are under intense scrutiny following The Baltimore Sun's report last month that nearly a third of the UMMS board of directors -- including Kelly -- did business with the hospital system.

"Maryland Insurance commissioner Al Redmer announced he will be investigating MAIF, Carefirst BC/BS and Kaiser Permanente," McDonough wrote in an email to The Sun. "How come Kelly & Associates 'Insurance Company' is missing from the list? Former State Senator Frank Kelly was the moving force behind the creation of the UMMS hospital system. His company has received millions of dollars in contracts from that system. At last count 16 million and growing in financial benefits for Kelly and Associates."

Redmer said he is likely to expand the probe and he advises McDonough to move on from campaign-mode attacks on him.

"The campaign's over," Redmer said.

luke.broadwater@baltsun.com

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