INSURANCE SUITS

A plague of lawsuits has broken out in the state capital. Specifically, the director of the Department of Insurance in Gov. Mel Carnahan's administration, Jay Angoff, is being sued more frequently and facing more serious allegations than any predecessor in recent memory.

Angoff is named, most recently, in a $28.5 million lawsuit filed by St. Louis businessman Jim Davis. Davis claims Angoff and his department harassed Davis' former title insurance company until he was finally forced out of business and spent three years unemployed. He is seeking $9 million in actual damages, $18 million in punitive damages and $1.5 million in attorney fees.

The heart of Davis' lawsuit is that Department of Insurance officials violated Davis' constitutional rights by abusing the department's regulatory and investigatory powers. The dispute began in 1993 when Angoff accused Community Title Co., of which Davis was president and founder, of fraud, conspiracy, forgery, incompetency and untrustworthiness. The next year, an administrative judge dismissed Angoff's charges, ruling the department had never proved its allegations of unsound underwriting practices. By that time, however, Angoff's heavy-handed tactics had put Davis' company out of business. The judge also found that Angoff's comments to the press "ruined the businesses" of Community Title and a subsidiary.

This isn't all. Blue Cross/Blue Shield of Missouri, which employs 1,500 Missourians, has served notice it is considering moving some or all of its operations out of the state if harassment from Angoff and his department isn't halted. At issue here is the creation of a for-profit subsidiary called RightChoice. Angoff is claiming Blue Cross/Blue Shield, which remains a not-for-profit entity, must forfeit to the state its members' assets to the tune of $200 million to $500 million.

Blue Cross/Blue Shield also claims that comments made by Angoff to the press caused the company's stock to drop "like a rock" in the words of chief executive Roy Heimburger.

The fundamental problem here is that in staffing his administration back in 1993, Gov. Carnahan went all the way to New Jersey to find Angoff, a left-winger who had once worked for Ralph Nader. There are many questions that will continue swirling about Angoff and his department -- as well as the chief executive who handpicked him.