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Gag order limits hearing on Insurance Commission

Tue., June 17, 2014, midnight

OLYMPIA – A legislative session billed as a chance to air charges of undue influence in the insurance commissioner’s office was something less than advertised Monday.

Patricia Peterson, the agency’s chief hearings officer who filed a whistleblower complaint and was later placed on leave, said she was under a gag order not to speak about aspects of the case. Sen. Adam Kline, the ranking Democrat on the Senate Law and Justice Committee, said legislators knew things about the case that they also couldn’t discuss.

Instead, legislators had to settle for discussions on how some state agencies might make some changes in the way they handle appeals of their decisions to improve both fairness and the appearance of fairness.

Peterson, who has been a hearings officer at the Insurance Commission for 28 years, was placed on leave last month after she filed a whistleblower complaint alleging a supervisor had attempted to influence her decision on a case involving Seattle Children’s Hospital and several insurance companies.

She told the committee she strives to give everyone a fair, independent hearing and doesn’t believe any of her decisions has ever been overturned on appeal. But she couldn’t talk about the specifics of the hospital case because of a “gag directive” from Commissioner Mike Kreidler.

Sen. Mike Padden, R-Spokane Valley, the committee chairman, said he’d invited Kreidler to attend the “work session” but the commissioner declined. Instead, he sent a pair of deputy commissioners to explain how the office’s hearing system works and to say Peterson’s allegations are under investigation.

The investigation should be available by the beginning of July and the final report will be available, Deputy Commissioner Shannon Beigert said.

“This is a personnel matter under investigation by the executive branch. It’s due in two weeks,” Kline said. “It’s not our business.”

But Padden said the committee could consider whether to propose legislation that would move the hearings officer out of the insurance commissioner’s office, make hearings officers more independent or make interference with the process by other officials in the agency a gross misdemeanor. Those bills can’t be introduced until December, the month before the Legislature convenes for its 2015 session.

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