BISMARCK (AP) -- Blue Cross Blue Shield of North Dakota has fired its president and chief executive officer after being criticized for a Caribbean retreat attended by more than 30 sales employees and guests.
Mike Unhjem has been the Blues' top executive since 1991.
The insurer said its 13-member board voted to fire Unhjem on Monday. The company said Tim Huckle, executive vice president of health operations, will serve as interim president and CEO.
Blues Chairman Dennis Elbert said the decision to fire Unhjem was necessary to move forward and to rebuild public trust.
"There's been a lot of positive change and many good things under his leadership, but it became apparent a change of leadership was needed," Elbert said.
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Elbert said he and other board members have fielded angry telephone calls from policyholders about a Cayman Islands retreat attended last week by Unhjem, marketing vice president Chad Niles, and 33 employees and their guests. The trip cost the insurer more than $250,000, or about $6,500 per couple, the company said.
Unhjem later said the company "should have more adamantly questioned the appropriateness" of the retreat.
Elbert said the insurer has since scrubbed such trips, which came at a time when it is seeking increases in three rate categories. Unhjem has said they are needed to cover the cost of claims.
Unhjem was hired by the insurer in 1986 as its attorney and vice president of corporate affairs. Earlier, Unhjem worked as a lawyer in Jamestown and served 12 years in the North Dakota state House.
Unhjem, in a statement, said he felt privileged to have worked for the company.
"Working together, we accomplished many great things, and I am proud of our collective successes and the positive impact we have had on the health care system in North Dakota," he said in the statement.
Elbert said a nationwide search will be conducted to find Unhjem's replacement. The insurer hopes to have someone hired before next year, he said.
Elbert would not say if Unhjem will get a severance package. He said Unhjem's contract will be honored but he would not disclose the details of the contract.
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Records show Unhjem's total compensation has increased 61 percent, from $412,371 in 2006 to $664,431 last year. Unhjem's bonus, which is included in the compensation package, tripled in three years, from $90,245 in 2006 to $285,909 in 2008.
The insurer said it lost $28 million last year, including $9 million from operations.
The nonprofit company, which is the state's dominant insurer, says it provides health care coverage to more than 375,000 North Dakotans and 75,000 nonresidents.
The trip last week prompted Insurance Commissioner Adam Hamm to call for an audit of the company's spending.
Hamm said Elbert called him on Tuesday morning and told him that Unhjem had been canned.
"Obviously, it was a decision that was up to the company to make ... that they believe is necessary to right the ship," Hamm said.
The Insurance Department will continue to pursue a "targeted financial examination" of the company.
"The wheels are in motion and the department is moving ahead," Hamm said.
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Elbert said the Caribbean trip was not the first time Unhjem's leadership had been questioned, though he did not give specifics.
"The board obviously has addressed a number of leadership issues and leadership challenges," he said.
An audit of the Blues in the early 1990s questioned travel expenses for its top executives and board members. The audit found Unhjem charged the company for an $800 helicopter ride in Hawaii and $280 for one day's taxi fares in New York City in June 1992. He eventually reimbursed the company for both bills.
Three years ago, Unhjem was arrested for drunken driving and fined $500 after pleading guilty. A judge stayed a 90-day jail sentence for two years.
Police in Moorhead, Minn., said Unhjem was pulled over in March 2006 while officers were investigating a possible break-in at a home. A man reported an intruder who drove away in a black sport-utility vehicle matching the description of Unhjem's SUV.
Unhjem denied going into anyone's home, but police said he did. The homeowner did not press charges.
