TIAA-CREF shareholders meeting hears call to divest from ‘unethical’ private health insurers

Shareholder’s comments provoke response from company’s president

CHARLOTTE, N.C. – Having suffered an earlier rejection by the leadership of TIAA-CREF of a shareholders resolution calling on the huge, nonprofit investment company to divest its funds from private health insurance firms because of the latter’s “unethical behavior,” a spokesperson for the divestment group took the microphone at the organization’s annual meeting Tuesday and urged just such a course of action.

Shareholder Sandra Fox, speaking on behalf of herself and others who have appealed to TIAA-CREF to divest its holdings in WellPoint and other giant health insurers, said such firms are not managed in an “exemplary and ethical manner” – a criterion for inclusion in the company’s portfolio – and therefore should be scrapped.

Going into to the meeting, Fox said: “The practices of these companies are anything but socially responsible. They make money by denying coverage, raising premiums, and increasing co-pays and deductibles, deterring patients from seeking care. Their everyday operations result in high overhead expenses, spiraling health care costs, worsening health, premature loss of life, and bankruptcy of countless Americans.”
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DIVESTMENT CAMPAIGN FOR HEALTH CARE investigates holdings by TIAA-CREF and urges divestment from health insurance companies

By Sandra Fox

Healthcare-NOW, the national grassroots organization for single-payer healthcare, together with Physicians for a National Health Program, began a committee in 2010 to look at divestment from for-profit health insurance companies. We called ourselves the Divestment Campaign for Health Care.

As a member of the committee and a participant in TIAA-CREF funds, the nation’s largest pension fund that offers retirement options to academic (including medical centers) and religious organizations, I decided to investigate their holdings in the “socially responsible” stock option called “CREF-Social Choice.” As a stakeholder, I wanted to make sure that health insurance companies were not included in this fund.

Upon reviewing the 2010 Audited Schedules of Investments for the fund, I was very disturbed to discover that CREF-Social Choice included holdings in Aetna, CIGNA, Coventry Health Care, Humana, and WellPoint.

According to their Summary Prospectus the five “social criteria” TIAA-CREF reports using to decide on their socially responsible holdings include:

1) Strong stewards of the environment;
2) devoted to serving local communities where they operate and to human rights and philanthropy;
3) committed to higher labor standards for their own employees and those in the supply chain;
4) dedicated to producing high-quality and safe products; and
5) managed in an exemplary and ethical manner.

I understood from reading the Prospectus that companies are screened and ranked by an outside vendor, namely MSCI Inc, and that TIAA-CREF invests in companies that “meet or exceed the screening criteria…,” though “…concerns in one area do not automatically eliminate a company from potential inclusion in the …Fund.”

I further understood from the Prospectus, that “Even if an investment is not excluded by MSCI’s criteria, Advisors has the option of excluding the investment if it decides the investment is inappropriate, though it is expected that Advisors will normally apply MSCI’s screening results.”

Thus began my inquiry directly with TIAA-CREF headquarters in NYC.
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