TOBACCO: Study Chastises Insurers for Stock Holdings
Although they claim to be invested in the provision and promotion of quality health care to Americans, several large insurers also are investing in tobacco companies, asserts a report published in today's Journal of the American Medical Association. Despite the AMA's 1996 call for "all physicians, health professionals, medical schools, hospitals, public health advocates and citizens ... and specifically ... all life and health insurance companies and HMOs to divest of any tobacco holdings," three Harvard researchers found that Prudential Insurance, MetLife and HMO giant Cigna continue to own substantial stock holdings in Big Tobacco (Boyd et al., 8/9). Prudential Insurance owns the biggest slice of tobacco stock, with $435 million invested in Philip Morris, nearly $320 million in Loews, and $137 million in RJ Reynolds, constituting a 400% increase in tobacco holdings in the last four years. MetLife follows with Philip Morris investments of $55 million and $7 million in Loews stock. Cigna trails with a $38 million investment in Philip Morris and a $4 million investment in Loews. In addition, the researchers found that several mutual funds, including Fidelity, Vanguard and TIAA-CREF or Sanford Bernstein, have tobacco holdings valued in the billions. Lead study author Dr. Wesley Boyd said of the findings, "A health insurer that buys tobacco stocks cares more about profits than the health of its patients. Teachers, physicians and those who invest their savings in mutual funds are unwitting accomplices in causing 400,000 tobacco deaths a year" ( onhealth.com/Newark Star-Ledger, 8/9). Researchers added, "A life or health insurer that buys tobacco [stock] positions itself to profit from both life and death. ... While insurers market an image of caring, mutual funds openly profess their focus on making money; few claim a broader social mission. But their tobacco investments have a certain flavor of money laundering. Many physicians and others who would never purchase tobacco stock directly find themselves the unwitting indirect owners of tobacco" (Boyd et al., 8/9).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.