Albany
During the trial of ex-Senate Majority Leader Dean Skelos last year, medical malpractice insurance executive Anthony Bonomo told jurors how Skelos had pressured him to hire the lawmaker's son, Adam, to what amounted to a no-show job. 
Prosecutors successfully argued that Skelos, in turn, pushed through legislation favorable to Bonomo's company, Physicians' Reciprocal Insurers, including a 2015 bill that featured exemptions protecting malpractice insurers operating at a loss from liquidation by state regulators.
At the time, PRI and another company were the only two medical malpractice insurers running at a loss in New York.
But that's not the only break granted by state government to the financially struggling firm, which has been one of the state's biggest political donors to politicians including Democratic Gov. Andrew Cuomo and former Republican Gov. George Pataki.
State insurance regulators have routinely suppressed taxpayer-funded reports on PRI's finances, examinations which likely would have painted the company as being in dire shape.
A spokesman for the state's insurance regulator, the state Department of Financial Services, refused to say why the reports had not been released, even as competitors' reports have often been made public.
The lack of public information on the company's finances is not an academic issue: If PRI were to collapse, it could have broad implications for the insurance industry, with the costs eventually passed on to New York consumers as higher home, auto or business insurance premiums. 
One person with knowledge of the Department of Financial Services' workings told the Times Unionthat the release of a negative report might cause doctors who currently use the insurer to flee to other companies. That scenario — similar to a Depression-era run on a bank — could throw PRI into turmoil.
In the context of the Skelos trial, the agency's failure to release the reports "does look really bad, like someone's got something to hide," the person said.
PRI's annual reports with the National Association of Insurance Commissioners have consistently indicated financial problems. In 2014, it reported having $86 million more in liabilities than in assets. 
That same year, PRI paid $250,000 to four Albany lobbying firms. "Financial Reporting" was listed as a priority for legislative needs for PRI in a disclosure form; the firm's lobbyists in the past have pushed for changes in the state's accounting methods that would tend to enhance PRI's shaky balance sheet.
Under New York law, state regulators are required to conduct deep, months-long examinations probing the books of medical malpractice insurance companies every five years. But since 1997, regulators have not publicly released any report detailing the results of fiscal checkups on PRI. The Department of Financial Service, created in 2011 through the merger of the state agencies that oversaw banking and insurance, refused to explain why neither the agency nor its predecessor, the state Insurance Department, have released the results of its PRI examinations for nearly two decades. 
"I can't speculate on why they haven't been posted (online)," said the agency's spokesman, Ron Klug.
PRI's annual financial statement for 2014, in fact, says that no examination report has become "available" from New York government since 1996.
Klug insisted the agency was following state law requiring audits every five years, but declined to provide copies of what he maintains are finished but unreleased reports.
Klug directed the Times Union to file a Freedom of Information Law request for the reports, which the agency has not yet filled.
And though Klug asserts state reports on PRI were completed in 2000, 2004 and 2009, a former Department of Financial Services spokesman told Bloomberg News last year that the state actually hadn't finished the 2009 exam.
Klug also declined to address how the agency's actions squared with a state law mandating the reports must be available for "public inspection within six months" of the completion of the examination process.
A new examination of PRI's finances began last September, Klug said.
"We can't speak to the actions of previous administrations," Klug said in a statement. "As we've stated before, the Department of Financial Services is currently conducting all required financial examinations of PRI and the determination of releasing the findings will be made by the new, incoming superintendent." (Maria Vullo was nominated to the post by Cuomo in January.)
PRI did not return the Times Union's requests for comment, but a company spokesman told Bloomberg News in September that the "next report will show a continued strengthening of the firm."
The examinations are meant to verify the accuracy of a company's financial statements and to assess whether its corporate conduct is in compliance with state laws, rules and regulations. The Department of Financial Services can place an insurance company in "rehabilitation" if its exam determines it is in hazardous financial condition. 
PRI is one of only five companies in the state authorized by the state to offer surgeons and physicians medical malpractice coverage. Since 2009, state government has publicly issued reports on the finances of the other four, but not on PRI.
The fiscal health of PRI should be of concern to its own policyholders as well as anyone who pays for home, auto, car or business insurance, according to Ellen Melchionni, president of the New York Insurance Association, which represents property and casualty insurers.
Many insurers operating in New York pay into a property and casualty guaranty fund that in essence operates as an insurance pool for insurance companies. If a medical malpractice insurer such as became insolvent, its claims would be paid out of the fund — thus increasing the assessments on other types of insurance companies. That cost would ultimately be passed on to policyholders.
Melchionni noted the decision last year by state regulators to shut down Health Republic, a large nonprofit cooperative created under the Affordable Care Act that was bleeding money. Some $200 million is owed to hospital and doctors.
"Health Republic is a stark indicator of the mayhem that can result from an insurance company insolvency," Melchionni said in a statement. "Insurance companies need to maintain a healthy surplus to ensure they can pay future claims. Allowing a medical malpractice insurer to operate in the red is terribly risky."
Last year, Cuomo named Bonomo chairman of the New York Racing Association, but he took a leave of absence in light of the Skelos case and received a non-prosecution agreement in exchange for his testimony at the trial.
In March 2015, several days before Bonomo's appointment as NYRA chairman, PRI gave Cuomo a $50,000 donation, its largest gift to the governor. In fact, Bonomo and his family members have given nearly $400,000 to the governor or the Cuomo-controlled state Democratic Party, and $877,000 to state candidates and party committees during the 2014 election cycle alone, Politico New York reported. 
In 2014, Bonomo's son, Anthony Bonomo Jr., began working in a job in the Cuomo administration, as an executive assistant for the Office of Storm Recovery. He left last year to attend law school, an agency spokeswoman said.
PRI also gave heavily to former Gov. George Pataki, who was at the midpoint of his first term when the last publicly released report on the company finances was completed.
cbragg@timesunion.com @chrisbragg1 (518) 454-5619