Advisory Opinion No. 2000-21

Application Of Code Of Ethics For Public Officials To Members Of The State Insurance And Risk Management Board

Daria J. Cirish, Risk Manager for the State Insurance and Risk Management Board (the "Board") has asked how the Code of Ethics for Public Officials, Conn. Gen. Stat. §1-79 et seq. (the "Code"), applies to members of the Board who are employed by or sit on board(s) of directors of companies that may do business with the State. The Board is statutorily created to determine the method by which the State shall insure itself against losses by the purchase of insurance. Conn. Gen. Stat. §4a-20. The eleven Board members, who are uncompensated for performance of their duties, are appointed by the Governor. Conn. Gen. Stat. §4a-19. Accordingly, Board members are public officials within the meaning of Conn. Gen. Stat. §1-79(k).

The duties of the Board are set forth in Conn. Gen. Stat. §4a-20. These duties are broad and involve negotiations of provisions in the insurance contract including those relating to deductibles and other risk retention provisions, self-insurance and the use of contingency fund reserves, and the development and implementation of risk management and loss prevention programs. The Board also has authority to negotiate commissions and fee structures to compensate agents for services performed pursuant to this section. To facilitate the Board in carrying out its mission, Conn. Gen. Stat. §4a-19 provides that seven of those eleven Board members "shall be qualified by training and experience to carry out their duties…." Accordingly, the mere fact of a Board member’s simultaneous employment in the insurance industry does not violate the Conn. Gen. Stat. §1-84(b) ban on outside employment. However, under Conn. Gen. Stat. §1-84(c), a Board member may not use his or her public position, or confidential information gained in state service, for personal financial gain or for the financial gain of a business with which he or she is associated. Conn. Gen. Stat. §1-84(c). A business with which one is associated is defined, in relevant part, as any sole proprietorship, partnership, firm, [or] corporation …in which the Board member or member of his or her immediate family is a director, officer or owner …. Conn. Gen. Stat. §1-79(b).

In answer to the question posed, therefore, Board members who also serve on a board of directors of any company appearing before the Board must abstain from any matter(s) involving their company. In so doing, those Board members must also logically abstain from participation in matters involving their company’s competitors to avoid even inadvertent violations of Conn. Gen. Stat. §1-84(c). Finally, in an effort to ensure the integrity of the Board’s process, Board members who are employed in any capacity by a company with business before the Board are likewise advised to recuse themselves from matters pertaining to their employers.

By order of the Commission,

Rosemary Giuliano,
Chairperson