HARTFORD, Conn. (AP) — Connecticut's Department of Insurance is playing a major role in a deal that could create the nation's largest health insurer, leading a 26-state review of Anthem Inc.'s proposed merger with Bloomfield-based Cigna.

Since Cigna is based in Connecticut, state insurance regulators are tasked with coordinating the review by other states with legal Cigna entities within their borders, informing them about Connecticut's evaluation of the massive merger, and hosting conference calls between the various state regulators.

"This transaction has a large number of states," said Connecticut Insurance Commissioner Katharine Wade. "Having 26 states involved, coordinating among regulators, is significant."

The application process for the proposed merger includes multiple steps, including approvals from shareholders. The U.S. Justice Department is currently reviewing Anthem's planned $54.2 billion acquisition of Cigna to determine whether the merger will hurt competition and consumers. About 53 million customers could be affected.

Ultimately, regulators in the 26 states will issue final approvals after considering issues such as the amount of local competition and the companies' financial conditions. In the U.S., states decide how insurers conduct business and what new companies can enter the market. State regulators may impose some conditions on the deal.

"We're going to make sure if these two companies come together, that there's enough competition, that there are enough other players in the marketplace," Wade said. Her agency plans to hire an independent economist to review market competition issues and assist the Department of Insurance team.

Connecticut Attorney General George Jepsen's staff is also reviewing the proposal for possible anti-trust issues.

On a joint website about the deal, the two insurers said they are "confident that state regulators will see the merits of the transaction and that they will approve it."

The top Senate Republican on the Connecticut General Assembly's Insurance and Real Estate Committee, Kevin Kelly, has questioned why Wade, a former Cigna vice president, didn't recuse herself from the process. Wade's husband is also Cigna's associate chief counsel for litigation in its law department.

Wade contends she can participate in the process fairly and objectively. She submitted a letter to the Office of State Ethics spelling out her role in the review process and saying she no longer owns any shares of Cigna stock. She said her husband holds only unvested shares that will be placed in a blind trust when vested. Wade said Cigna has formally recused her husband from any matters involving her agency.

A public hearing is planned in Connecticut, likely next year, on the merger. The first part of the application, a whopping 3,000 pages, was posted last week to the Department of Insurance website. Besides interest from customers, the two companies employ thousands in Connecticut who will likely be paying attention to the proceedings. Anthem's local subsidiary in Wallingford has about 1,400 workers while Cigna employs about 4,200 in the state.

Anthem's application states it has "no current plans or proposals to reduce in any material respect the number of employees employed by the Cigna companies."

Connecticut Sen. Richard Blumenthal has voiced concerns about the Anthem/Cigna merger, as well as Aetna's proposed $35 billion deal for Humana. At a recent Senate Judiciary Committee hearing, he said the Department of Justice should scrutinize the mergers together to determine their combined effect on the overall health insurance marketplace. If approved, the two mergers would reduce the number of insurance giants from five to three.

"At its core, these two mega-mergers threaten higher prices through rising premiums and other costs to consumers. It's really that simple," Blumenthal, the state's former attorney general, told The Associated Press.

The insurers have said these combinations will help them save money by reducing overlapping costs and improving technology. On the joint website, both said "the marketplace is, and will remain, highly competitive, and customers will continue to have a wide range of competitors to choose from."

Blumenthal urged state officials "to be as expansive and creative as possible" in their interpretation of their authority when reviewing the deal.

"They have a stewardship responsibility, a public trust in protecting consumers," he said.

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On the Web:

www.ct.gov/cid