Insurers' tobacco investments questioned

Companies dispute researchers' tally of tobacco stock holdings, and deny conflict of interest in holding small investments or investing on behalf of a third party.

By Emily Berry — Posted June 23, 2009

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Life and health insurance companies continue to invest in tobacco companies, according to a letter published in the June 4 New England Journal of Medicine detailing major insurers' holdings. The letter is posted in its entirety on the Physicians for a National Health Program's Web site (link).

The letter is signed by three physicians at the Cambridge Health Alliance, a system of three hospitals and clinics in Boston. The authors call for policymakers to exclude insurers from health system reform efforts based on companies' interest in profits.

"In case there is any doubt that insurers place profit above health, consider their investments in tobacco," the letter reads.

The listed companies, including Prudential Financial, New York Life Insurance Co., Sun Life Financial and Massachusetts Mutual Life Insurance Co., sell primarily life insurance coverage, but in some cases offer health, disability and long-term care coverage as well.

The published figures show a combined $4.4 billion investment in five large tobacco companies.

The insurers strongly disputed the listed amounts of investments. Some said they invest in tobacco only on behalf of third parties.

"Prudential Financial Inc.'s corporate policy is not to invest in tobacco stocks for its own portfolios," spokeswoman Gabrielle Shanin said in an e-mailed statement.

New York Life has the same type of policy, spokesman William Werfelman said in an e-mailed statement.

Sun Life Financial spokesman Steve Kee said the company's tobacco holdings are much smaller than the researchers claim, equal to less than 0.005% of its more than $100 billion investment portfolio.

J. Wesley Boyd, MD, PhD, a psychiatrist and lead author of the letter, said he heard the same objections when he published a similar study in 1995, but that independent researchers and journalists had verified his findings.

Dr. Boyd said he based the published numbers on a March 26 search of the Osiris database, which allows users to identify owners of publicly traded companies.

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