Chief of Empire Blue Cross and Blue Shield Resigns
May. 20, 1993
ALBANY, N.Y. (AP) _ The chief of Empire Blue Cross and Blue Shield, the nation's largest nonprofit health insurer, resigned Thursday after months of battling critics over his management and the company's financial problems.
Albert Cardone, who earned $600,000 a year as chairman and chief executive officer, was replaced by two executives. The company operates only in New York State, insuring more than 8 million people.
Financial reserves had dwindled during the last two years, and the Legislature approved a $100 million bailout to soften the impact of rate increases on about 350,000 customers.
Cardone's resignation came a month after a state audit criticized Empire for its slow response to changes in the health insurance market.
Cardone, 58, agreed to step down following a meeting Wednesday of Empire's board of directors. In a statement, he said he wanted to ''pursue other interests and spend more time with my six daughters and their families.''
No financial terms have been reached, said Empire spokesman John Kelly.
Harold Vogt, an Empire board member and president of the Westchester County Chamber of Commerce, will be the new chairman. Donald Morchower, Empire's chief operating officer, was named interim chief executive officer.
Splitting Cardone's dual role ''just makes sense at this time,'' Vogt said. ''There is a need in some ways to give the chief executive officer some latitude.''
Last year, the Legislature adopted groundbreaking new rules to force commercial insurers to take all customers, designed in large part to stop those companies from siphoning Empire's healthiest customers.
Empire blamed the ''cherry-picking'' for its financial problems, but lavish salaries and perks given to executives and management mistakes that allegedly cost the company millions of dollars drew the attention of regulators and state lawmakers.