Executives at the overextended hospital chain have treated their in-house malpractice insurer, TRACO, like a piggy bank, pulling cash from it at will, and severely depleting the assets meant to cover claims of medical harm. Indeed, Steward was so eager to spend TRACO's money that it moved the insurer from the Cayman Islands — a traditionally permissive locale for foreign investors — to Panama, where certain key regulations were even more lax. Auditors had been pushing Steward to shore up TRACO's balance sheet. But executives had other plans for the insurer's assets and believed Panama would allow them more freedom to spend, according to three Steward insiders and internal company emails.
