UNITED STATES 


SECURITIES AND EXCHANGE COMMISSION 


WASHINGTON, D.C. 20549 


DIVISION OF May 10,2013 INVESTME NT MANAGEMENT 

Phillip T. Rollock 

Senior Managing Director and 

Corporate Secretary 

College Retirement Equities Fund 

730 Third Avenue 

New York, NY 10017-3206 

Re: 	 College Retirement Equities Fund ("Fund") 


Shareholder Proposal of Sandra M. Fox 


Dear Mr. Rollock: 

In a letter dated March 22, 2013, you notified the staff of the Securities and Exchange 

Commission ("Commission") that the Fund intends to omit from its proxy materials for its 2013 

annual meeting a shareholder proposal submitted by Sandra M. Fox in a letter dated January 26, 

2013. 1 The proposal provides: 

THEREFORE BE IT RESOLVED that the participants request that TIAA-CREF 

exclude health insurance companies from the portfolio fund of CREF-Social 

Choice, in accordance with reasonable expectations for socially responsible 

investing. 

There appears to be some basis for your view that the proposal may be omitted from the 

Fund's proxy materials pursuant to Rule 14a-8(i)(7) under the Securities Exchange Act of 1934, 

as relating to CREF' s ordinary business operations. 

Accordingly, the Division ofInvestment Management ("Division") will not recommend 

enforcement action to the Commission ifthe Fund omits the proposal from its proxy materials in 

reliance on Rule 14a-8(i)(7). In reaching this position, we have not found it necessary to address 

the alternative bases for omission set forth in your letter. 

Because our position is based upon the facts recited in your letter, different facts or 

conditions or additional facts or conditions may require a different conclusion. Further, this 

response only expresses our position on enforcement action under Rule 14a-8 and does not 

express any legal conclusion on the issues presented. 

We also received a letter submitted on behalf ofthe proponent dated March 27 , 2013, and a letter 

from the Fund dated April 22, 2013 . 
Phillip T. Rollock 

May 10,2013 

Page 2 of2 

Attached is a description of the infonnal procedures the Division follows in responding to 

shareholder proposals. If you have any questions or comments concerning this matter, please 

call me at (202) 551-6795. 

Sincerely, 

4J 

Deborah D. 

6Jk~ Skeens 

Senior Counsel 

Insured Investments Office 

Attachment 

cc: Sandra M. Fox 
DIVISION OF INVESTMENT MANAGEMENT 

INFORMAL PROCEDURES REGARDING SHAREHOLDER PROPOSALS 

The Division of Investment Management believes that its responsibility with respect to 

matters arising under Rule 14a-8 [17 CFR 240.14a-8], as with other matters under the proxy 

rules, is to aid those who must comply with the rule by offering informal advice and suggestions 

and to determine, initially, whether or not it may be appropriate in a particular matter to 

recommend enforcement action to the Commission. In connection with a shareholder proposal 

under Rule 14a-8, the Division's staff considers the information furnished to it by an investment 

company in support ofits intention to exclude the proposals from the investment company's 

proxy material, as well as any information furnished by the proponent's representative. 

The staff will always consider information concerning alleged violations of the statutes 

administered by the Commission, including argument as to whether or not activities proposed to 

be taken would be violative ofthe statute or rule involved. The receipt by the staff ofsuch 

information, however, should not be construed as changing the staffs informal procedures and 

proxy review into a formal or adversary procedure. 

The determination reached by the staff in connection with a shareholder proposal 

submitted to the Division under Rule 14a-8 does not and cannot purport to "adjudicate" the 

merits of an investment company's position with respect to the proposal. Only a court, such as a 

U.S. District Court, can decide whether an investment company is obligated to include 

shareholder proposals in its proxy material. Accordingly, a discretionary detennination not to 

recommend or take Commission enforcement actions, does not preclude a proponent, or any 

shareholder of an investment company, from pursuing any rights he or she may have against the 

investment company in court, should the management omit the proposal from the investment 

company's proxy material. 
~~ 1:, Phillip T. Rollock Senior Managing Director and 

FINANCIAL SERVICES Corporate Secretary FOR 1liE GREATER GOOD" Tel: (212) 916-4218 

Fax: (212) 916-6524 

prollock@tiaa-cref.org 

March 22, 2013 

VIA HAND DELIVERY 

William J. Kotapish, Esq. 

Assistant Director 

Division of Investment Management 

U.S. Securities and Exchange Commission 

100 F Street, N.E. 

Washington, DC 20549 

Re: 	 College Retirement Equities Fund- 2013 Annual Meeting 


Omission of Shareholder Proposal of Sandi-a M. Fox et al. 


Dear Mr. Kotapish: 

College Retirement Equities Fund ("CREF") intends to omit from its proxy 

statement and form of proxy ("2013 Proxy Materials") a shareholder proposal and 

supporting statement that were submitted to CREF by Sandra M. Fox ("Proponent"), dated 

January 26, 2013 ("Proposal"),1 for CREF's 2013 annual meeting? This letter provides 

notice to the staff ("Staff') of the Securities and Exchange Commission ("Commission") of 

CREF's intent to omit the Proposal. 

CREF is subject to the non-profit corporation law of New York, regulation by 

various state insurance departments and is registered with the Commission as a diversified, 

open-end management investment company under the Investment Company Act of 1940, 

as amended? CREF and Teachers Insurance and Annuity Association of America 

("TIAA") form the principal retirement system for the nation's education and research 

Sandra M. Fox with Johanna W. H. van Wijk-Bos submitted the proposal for inclusion in the 

2013 Proxy Materials

which is attached as Exhibit A

In the correspondence, the participants 
communities. The fmancial services organization of which both companies are a part is 

sometimes referred to as "TIAA-CREF."4 

The Proposal requests that the CREF Social Choice Account ("Account") exclude 

from its portfolio investments all health insurance companies because their practices, 

according to the Proposal, "result in spiraling healthcare costs, worsening health, premature 

loss of life, and bankruptcy for countless Americans." Specifically, the Proposal requests 

shareholder action on the following resolution: 

THEREFORE BE IT RESOLVED that the participants request that 

TIAA-CREF exclude health insurance companies from the portfolio 

fund of CREF-Social Choice, in accordance with reasonable 

expectations for socially responsible investing. 

We believe that Rule 14a-8 under the Securities Exchange Act of 1934, as 

amended ("Exchange Act"), permits CREF to omit the Proposal from the 2013 Proxy 

Materials based on three express exclusions: (1) the Proposal deals with a matter relating to 

CREF's ordinary business operations, and thus is excludable pursuant to subparagraph 

(i)(7) of Rule 14a-8; (2) the essential objective of the Proposal already has been 

substantially implemented, and thus the Proposal is excludable pursuant to subparagraph 

(i)(lO) of Rule 14a-8; and (3) the Proposal is misleading in contravention of Rule 14a-9 

under the Exchange Act, and thus is excludable pursuant to subparagraph (i)(3) of Rule 

14a-8. 

For these reasons, we request that the Staff confirm that it will not recommend that 

enforcement action be taken if CREF omits the Proposal from its 2013 Proxy Materials. 

Please be advised that, pursuant to paragraph (j) of Rule 14a-8, CREF 

simultaneously has notified the Proponent of its intent to omit the Proposal from its 2013 

Proxy Materials by a copy of this letter. 

I. 	 ANALYSIS 

A. 	 The Proposal may be excluded under Rule 14a-8(i)(7) because it deals with 

matters relating to CREF's ordinary business operations. 
company on a day-to-day basis that they could not, as a practical matter, be subject to direct 

shareholder oversight." The second consideration relates to "the degree to which the 

proposal seeks to 'micro-manage' the company by probing too deeply into matters of a 

complex nature upon which stockholders, as a group, would not be in a position to make an 

informed judgment."5 

1. 	 The Proposal impermissibly seeks to subject fundamental 

management functions - the selection and ongoing assessment of 

portfolio investments - to an inappropriate level of shareholder 

oversight and micro-management. 

As the Staff has recognized in numerous Rule 14a-8 no-action letters, "the ordinary 

business operations of an investment company include buying and selling portfolio 

securities."6 Omitting the Proposal thus fits squarely within the purpose of the exclusion for 

"management functions." 

The Proposal directs the Account to divest from, and prohibit future investment in, 

a specific industry -health insurance companies. By excluding the Account's ability to 

seek investment exposure to such a large industry, the Proposal would directly and 

materially limit investment discretion in a way that could impact adversely the risk/return 

characteristics of the Account. In this regard, the Proposal amounts to the micromanagement of essential business functions by shareholders, which is exactly what the 

ordinary business or "management functions" exclusion under Rule 14a-8 is designed to 

prevent? The argument for excluding the Proposal is particularly strong in this case, 

because the Proposal's supporting statement identifies specific issuers -Aetna, CIGNA, 

Coventry Health Care, Humana and W ellPoint - as companies from which the Account 

should divest. The Staff previously has granted similar no-action assurance to CREF in 

connection with proposals relating to investments in specific portfolio companies under the 

Amendments to Rules on Shareholder Proposals, Exchange Act Release No. 40018 (May 21, 

1998) ("Rule 14a-8 Release"). 

College Retirement Equities Fund

SEC No-Action Letter (pub

avail

May 3

2004) ("2004 

6 
ordinary business exclusion.8 The Staff also has allowed for exclusion when a group of 

specific companies or issuers of a discrete industry is at issue. 9 

It is notable that the Proposal requests that CREF exclude all health insurance 

companies from the investment portfolio of the Account, without regard to the judgment of 

CREF's Board of Trustees ("Board") or Investment Manager, and without regard to the 

specific business practices of any particular health insurance company. This distinguishes 

the Proposal from shareholder proposals that fundamentally defer to the judgment of a 

fund's board to establish policies for the evaluation of specific portfolio companies- for 

example, various "anti-genocide" proposals requesting that a fund's board "institute 

procedures" to avoid investments in companies that, "in management's judgment, 

substantially contribute to genocide or crimes against humanity, the most egregious 

violations of human rights."10 In this case, the Proposal does not defer to the judgment of 

the Board to adopt, or the Investment Manager to implement, policies relating to 

investment in health insurance companies that engage in certain practices. Instead, the 

Proposal contemplates the exclusion of an entire industry of issuers from the Account, 

without permitting any Board discretion to review or establish policies, or flexibility for the 

Investment Manager to evaluate any particular company's business practices. 

In addition, by mandating divestment from companies in a particular industry, the 

Proposal interferes with the Account's environmental, social, governance ("ESG") criteria 

for socially responsible investing. The ESG criteria are well-established, fully-disclosed, 

Board-approved policies of the Account. To the extent the Proponent disagrees with the 

Investment Manager's implementation of the ESG criteria, such disagreement only 

highlights why the Proposal should be excluded as infringing on CREF's "ordinary 

business operations," as such investment decisions are inherently a management function. 

Furthermore, the Proposal's demand for prompt divestment from the industry interferes 

with TIAA-CREF's detailed procedures relating to divestment decisions. All TIAA-CREF 

funds and accounts have historically followed a policy of engagement, when judged 

appropriate, over divestment because it is believed to be the "optimal strategy for changing 

8 	 See, e.g., College Retirement Equities Fund, SEC No-Action Letter (pub. avail May 6, 2011) 

(fmding that a proposal requesting that the board consider divestment from issuers with 

activities on the West Bank was excludable because it related to CREF's ordinary business 

b

il

S
the policies and practices of portfolio companies." 11 Here, the Proposal does not 

contemplate engagement with issuers prior to divestment. Indeed, TIAA-CREF's 

engagement over divestment policy is an integral part of TIAA-CREF's investment 

activities. The TIAA-CREF Policy Statement on Corporate Governance ("Policy 

Statement") states: 

"Our policy of engagement over divestment is a matter of principle that 

is based on several considerations: (i) divestment would eliminate our 

standing and rights as a shareholder and foreclose further engagement; 

(ii) divestment would be likely to have negligible impact on portfolio 

companies or the market; (iii) divestment could result in increased 

costs and short-term losses; and (iv) divestment could compromise our 

investment strategies and negatively affect our performance."12 

In implementing this policy, CREF regularly communicates directly with numerous 

portfolio companies each year on matters of corporate governance and social responsibility, 

and has established policies and procedures that guide the selection of both portfolio 

companies and engagement objectives. As applied to the Account, the Proposal seeks to 

abrogate a fundamental management function and long standing corporate governance 

methodology of CREF, and completely bypass the engagement process by strictly 

excluding every health insurance company from the Account's investment portfolio. As a 

group, shareholders lack sufficient information about the entire health insurance industry to 

mandate these investment exclusions for the Account on behalf of all Account 

shareholders, and allowing this Proposal to proceed could subject specific business 

judgments to decision-making by referendum in the future. No socially responsible fund 

can be effectively managed if it is subject to annual referenda on its investment decisions or 

social screening methodology. In addition, if implemented, the Proposal would burden 

shareholders that rely on the Account's well-established and fully-disclosed social 

screening methodology by requiring that they take on watchdog roles in order to ensure that 

their investments are not impacted by the specific requests of shareholder factions. 

Because the Proposal deals with matters that are fundamental to CREF' s ordinary 

business operations, the Proposal may be excluded from CREF's proxy materials pursuant 

to Rule 14a-8(i)(7). 
2. 	 The proposal does not raise significant "social policy" issues that 

would justify an exception from the ordinary business exclusion. 

We recognize the Commission's view that a shareholder proposal that relates to 

certain types of management functions may not be excludable under Rule 14a-8(i)(7) if the 

proposal "would transcend the day-to-day business matters and raise policy issues so 

significant that it would be appropriate for a shareholder vote."13 That is not the case here. 

The Proposal does not raise a widely-accepted social policy that is appropriate for a 

shareholder vote. On the contrary, the Proposal targets an entire industry- health insurance 

companies - for allegedly engaging in unethical business practices. This is not the type of 

widely-accepted significant social policy that would transcend the ordinary business 

exclusion. 

We recognize that many shareholders of operating companies have attempted to 

include proposals that promote healthcare reform in proxy materials. While the Staff 

historically has allowed the exclusion of such proposals,14 more recently the Staff has 

declined to provide no-action assurance where proponents simply have asked companies to 

adopt broad principles supporting healthcare reform without requesting additional company 

action. 15 These later proposals differ significantly from the Proposal for two reasons. 

First, the Proposal does not simply advocate for healthcare reform. It castigates the 

business practices of an entire industry - health insurance companies - and requests that the 

Account divest from, and prohibit future investments in, such industry regardless of the 

particular business practices of individual companies comprising the industry. Accordingly, 

the Proposal differs significantly from proposals where companies were asked to adopt 

broad policy statements in support ofhealthcare reform generally. 

Second, in the healthcare reform proposals where the Staff declined to provide the 

requested no-action assurance, the proposals did not request additional company action 

beyond the adoption of broad principles relating to healthcare reform. In this case, the 

Proposal requires specific company action in the form of a categorical prohibition on 

13 	 See Rule 14a-8 Release, supra note 5. 

14 	 See Int'l Business Machines Corp., SEC No-Action Letter (pub. avail. Jan. 13, 2005) (the 

incoming letter stated "In all of those earlier [shareholder proposal exclusion cases] advocating 

or otherwise promoting national health care coverage or similar insurance

the [S]taffuniformly 
Account investments in an entire industry (i.e., health insurance companies) - the very 

essence of the Account's day-to-day business operations (i.e., the buying and selling of 

portfolio securities). A review of the Staffs responses to various healthcare reform 

proposals leads to the conclusion that the Staff distinguishes those proposals requesting a 

company adopt broad reform principles from proposals that contemplate further action 

from a company.16 Accordingly, we do not believe that the Proposal qualifies as a 

significant "social policy" matter, and thus is excludable pursuant to Rule 14a-8(i)(7). 

B. The Proposal may be excluded under Rule 14a-8(i)(10) because the 

essential objectives of the Proposal already have been substantially 

implemented. 

Rule 14a-8(i)(10) permits omission of a shareholder proposal if "the company has 

already substantially implemented the proposal." 

The Proposal calls on the Account to divest from, and prohibit future investment 

in, all health insurance companies because such companies allegedly engage in unethical 

business practices. The Account however, is already subject to well-established, transparent 

Board-approved ESG criteria that screen potential investments based, in part, on the 

issuer's business practices. Moreover, the Account also is subject to TIAA-CREF's policies 

for engagement with portfolio companies, when judged appropriate, on a broad range of 

matters including the ethical business practices of such portfolio companies, and divestiture 

when judged appropriate. Accordingly, the Account has substantially implemented the 

essential objectives ofthe Proposal. 17 

The Staff has stated that "a determination that [a] [c]ompany has substantially 

implemented the proposal depends upon whether its particular policies, practices and 

procedures compare favorably with the guidelines of the proposal." 18 Significantly, when 

applying the substantial implementation standard, a proposal need not be "fully effected."19 

16 	 See, e.g., Wyeth, SEC No-Action Letter (pub. avail. Feb. 25, 2008) and CVS Caremark Corp., 

SEC No-Action Letter (pub. avail. Jan. 31, 2008) (permitting exclusion of a proposal that asked 

the board of a company to both adopt principles for healthcare reform and to report annually on 

how it is implementing those principles). See also Int'l Business Machines Corp., SEC NoAction Letter (pub. avail. Dec. 17, 2008) (permitting exclusion of a proposal requiring a 

company to provide shareholders with information about employee health benefits and to join 

other companies in supporting a national health insurance system)
Rather, the Staff will grant no-action assurance when a company has implemented the 

essential objective of a proposal, even in cases where the company's actions do not fully 

comply with the specific dictates ofthe proposal. 20 

The Account engages MSCI, Inc., an independent research provider, for the 

purpose of providing the Account's ESG-eligible investments. All issuers must meet or 

exceed minimum ESG performance standards to be eligible for investment by the Account. 

The ESG screening process favors issuers that outperform on such criteria relative to peers. 

The ESG evaluation is industry-specific in that it identifies indicators key to the industry, 

which are then over-weighted in the analysis as compared to the broader range of potential 

comparative indicators. Underperformance on certain criteria metrics does not 

automatically cause an issuer to be excluded as an eligible investment for the Account. The 

ESG performance assessment reviews various industries and sectors, including health 

insurance companies, and often considers the types of issues identified in the Proposal. For 

example, in considering whether a particular health insurance company is managed in an 

"exemplary and ethical manner," the ESG assessment already takes into consideration 

controversies over policy cancellations, delayed or inaccurate reimbursements or other 

contract issues relating to insured persons. In fact, certain health insurance companies have 

been excluded from the Account due, in part, to the types of concerns raised by the 

Proponent. In addition to these procedures, TIAA-CREF's corporate governance group has 

established procedures for monitoring and, if appropriate, engaging portfolio companies, as 

well as divestment in rare circumstances.21 Accordingly, these policies and procedures 

substantially address the main objective of the Proposal without implementing an overlybroad policy that would exclude all health insurance companies, even those that are not 

engaged in the practices cited by the Proponent. 

In this case, the essential objective of the Proposal requests the Account not invest 

in health insurance companies because, according to the Proposal, such companies engage 

in unethical business practices, and therefore, in the Proponent's view, the entire health 

insurance industry should be ineligible when applying the Account's ESG criteria. The 

Account however, already has adopted procedures to review and determine eligibility for 

investments in the Account, including an assessment of the types of concerns raised by the 

Proposal. Accordingly, the Policy Statement and CREF's practices thereunder, in particular the Account's ESG criteria, address the Proposal's overarching essential objective - the 

Account's divestment from companies that are not "managed in an exemplary and ethical 

manner

"22 The fact that the Proponent disagrees with the implementation of these policies
insofar as Account investments in health insurance companies are not categorically 

prohibited, does not change the fact that the essential objectives of the Proposal have been 

substantially implemented by the adoption of these policies. Accordingly, the Account's 

ESG criteria, and CREF's comprehensive corporate governance policies, compare 

favorably with the guidelines of the Proposal and implement the essential objective of the 

Proposal. Therefore, the Proposal may be excluded from CREF' s 2013 Proxy Materials 

pursuant to Rule 14a-8(i)(10). 

C. The Proposal may be excluded under Rule 14a-8(i)(3). 

An issuer may omit a shareholder proposal or supporting statement from its proxy 

materials under Rule 14a-8(i)(3) when the proposal or supporting statement is "contrary to 

any of the Commission's proxy rules, including Rule 14a-9, which prohibits materially 

false or misleading statements in proxy soliciting materials." The Staff has recognized that 

a proposal may be excluded under Rule 14a-8(i)(3) when it makes charges concerning 

improper, illegal, or immoral conduct or association without a factual basis.23 

The Proposal includes factual assertions that are, in many cases, generalizations 

applied to every company in the health insurance industry. These assertions are highly 

controversial, are subject to widely differing views as to their accuracy and cannot be 

applied to the health insurance industry as a whole.24 CREF could not include the Proposal 

in its 2013 Proxy Materials without providing a response. CREF however, does not believe 

it would be possible to provide a fair and balanced presentation on these facts and issues 

that would provide a basis for shareholders to reach an informed view on the merits of the 

Proposal. Even if it were possible to provide a balanced discussion of the facts asserted, 

CREF does not believe that the Commission's proxy rules are intended to subject issuers to 

the severe burdens and expense of attempting to make their proxy materials a full and fair 

forum for debate on the practices of health insurance companies. Due to the misleading 

nature of the Proponent's assertions, the Proposal is excludable pursuant to Rule 14a8(i)(3). 

II. CONCLUSION 

In view of the fact that (1) the Proposal deals with matters relating to CREF's 

ordinary business operations, (2) the Proposal already is substantially implemented, and (3) 

it contains false and misleading statements, it is our opinion that CREF, in accordance with 
from the Staff that it will not recommend enforcement action to the Commission if CREF 

excludes the Proposal from its 2013 Proxy Materials. 

If the Staff disagrees with our conclusion that the Proposal may be excluded from 

CREF's 2013 Proxy Materials, we would appreciate an opportunity to discuss the matter 

with the Staff prior to issuance of its formal response. As required by Rule 14a-8(j), six 

copies of this letter and its attachments are enclosed and a copy is being forwarded 

concurrently to the Proponent. 

Very truly yours, 

Phillip T. Rollock 

Senior Managing Director and 

Corporate Secretary 

College Retirement Equities Fund 

cc: 	 JeffreyS. Puretz, Esq. Dechert LLP 

Thomas C. Bogle, Esq. Dechert LLP 

Adam T. Teufel, Esq. Dechert LLP 

Attachment: 

Proposal (Exhibit A) 

17063328 
Exhibit A 

6335 Morrowfield Avenue 


Pittsburgh, Pennsylvania 15217 


January 26, 2013 

Phillip Rollock 


Corporate Secretary 


TIAA-tREF 


730 Third Avenue 


New York, New York 10017-3206 


RE: Proposal for shareholders resolution 

Dear Mr. Rollock: 

Johanna W. H. van Wijk-Bos and I are submitting the enclosed proposal for a shareholders resolution 

regarding TIAA-tREF holdings in health insurance companies. 

I am a participant with over $2000 invested with CREF continuously for over ayear, and I plan to hold 

this investment at least until the time of the annual meeting. I will be present in person or by proxy at 

that meeting. 

I am the lead filer ofthis proposal. 

In addition to the proposal, please find enclosed the verification of shares owned and length of time 

owned by Johanna W.H. van Wijk-Bos and myself, as well as Johanna's verification that she plans to hold 

her investment at least until the time ofthe annual meeting. 

Thank you for your attention to this matter. 

Sincerely, 

~~A-~ 

Sandra M. Fox 


Enclosures 

J

~uisville

' Seminary 

1044 Alta Vista Rd 


louisville, Kentucky 40205-1798 


January 4, 2013-01-04 

Phillip Rollock 


Corporate Secretary 


TIAA-CREF 


730 Third Ave 


New York, New York 10017-3206 


Re: Proposal Shareholders Resolution 

Dear Mr. Rollock 

Enclosed you find the proposal for a shareholders resolution that I am submitting together with

Sandra Fox, the lead filer for this resolution. 

I also enclose the verification of shares owned by myself and hereby state my intent to hold my

investment at least until the time of the annual meeting. 

!n addition, it is my intention to attend the annual shareholders meeting of this year in person

or by proxy. 

With re~~J.ds----·-·--

...· 
PROPOSAL OF SHAREHOLDER'S RESOLUTION TO TIAA-CREF 

RE: CREF-SOCIAL CHOICE HOLDINGS IN HEALTH INSURANCE COMPANIES 

Whereas, we and many other TIAA-CREF participants with holdings in CREF-Social Choice believe that 

these funds should be invested in socially responsible companies that do not routinely harm individuals 

and are "managed in an exemplary and ethical manner" (the latter is one offive social criteria listed in 

the TIAA-CREF Summary Prospectus as factors guiding fund inclusion); 

Whereas the inclusion of Aetna, CIGNA, Coventry Health Care, Humana, and Wellpoint violates these 

expectations; 

Whereas, there is ample evidence that the health insurance industry in this country routinely harms 

individuals and is rife with unethical behavior, as documented by Linda Peeno, M.D., who as a former 

medical reviewer testified about the harmful and unethical practices of the health insurance industry in 

1996 and again on September 16, 2009, before the Oversight and Government Reform Committee; 

Whereas, additional testimony has been provided by Wendell Potter, a former executive at both 

Humana and CIGNA, who wrote about the practices of these companies in his 2010 book Deadly Spin: 

An Insurance Company Insider Speaks Out on How Corporate PR is Killing Health Core and Deceiving 

Americans; 

Whereas, Potter left CIGNA in 2008 after 20 years in the industry and testified to a U.S. Senate 

Commerce, Science, and Transportation Committee on June 24, 2009 that "insurance companies make 

promises they have no intention of keeping...flout regulations designed to protect consumers... make it 

nearly impossible to understand-or even obtain-information needed by consumers... routinely cancel 

the coverage of policy-holders who get sick, and ...'purge' small businesses when employees' medical 

claims exceed what underwriters expected (p. 11)"; 

Whereas, on June 17, 2009, health insurance executives from WellPoint, UnitedHealth Group, and 

Assurant testified before the U.S. House Subcommittee on Oversight and not only admitted to their 

company's practice of rescission, or cancelling people's insurance when they become very ill, but 

refused to stop the practice; 

Whereas, health insurance companies make money by denying coverage, raising premiums, and 

increasing out-of-pocket costs, and spend 15-30% of the healthcare dollar on administrative overhead 

(including profit, exorbitant executive salaries, and marketing costs) compared to less than 2% for 

t

diti

l M

di
Whereas, a single-payer, Improved Medicare for All system would provide excellent coverage to all by 

taking the private health insurance companies out of the equation and putting the needs of patients 

before profit; 

THEREFORE BE IT RESOLVED that the participants request that TIM-CREF exclude health insurance 

companies from the portfolio fund of CREF-Social Choice, in accordance with reasonable expectations 

for socially responsible investing. 

Submitted by: 

-;:;-~-~

'sandra M. Fox 
6335 Morrowfield Ave.
 

Pittsburgh, PA 15217 

March 27, 2013
 

William J. Kotapish, Esq. 

Assistant Director 

Division of Investment Management 

U.S. Securities and Exchange Commission 

100 F Street, N.E. 

Washington, DC 20549 

Re: College Retirement Equities Fund-2013 Annual Meeting 

Rebuttal to TIAA-CREF's Request for Omission of Shareholder Proposal of Sandra M. Fox and Rev. Dr.
 

Johanna W.H. van Wijk-Bos 

Dear Mr. Kotapish: 

I am writing on behalf of Rev. Dr. Johanna W. H. van Wijk-Bos and myself, co-signers of a Proposal for a 

Shareholders Resolution to TIAA-CREF regarding CREF-Social Choice Holdings in Health Insurance
 

communication dated March 22, Companies. The purpose of this letter is to provide a rebuttal to the 


2013 sent to you from Phillip T. Rollock, Senior Managing Director and Corporate Secretary of the
 

College Retirement Equities Fund of TIAA-CREF. Asyou know, Mr. Rollock seeks omission of our
 

proposal. Mr. Rollock's analysis requests exclusion of the proposal on the basis of three premises, with 

reference to allowances under Rule 14a-8 of the Securities Exchange Act of 1934: 

1) that the proposal interferes with "CREF's ordinary business operations," subjecting
 

"fundamental management functions... to an inappropriate level of shareholder oversight and 

policy' issuesthatwould justify an micro-management" and i'does not raise significant isocial 


exception from the ordinary business exclusion;"
 

"may be excluded... because the essential objectives of the Proposal already 

have been substantially implemented;" and 

2) that the proposal 


3) that the proposal 
 "contains false and misleading statements."

Regarding these premises, CREF-Social Choice is advertised as a socially responsible fund that adheres to 

specific social criteria for inclusion in the fund, including the criterion that companies be "managed in an 

~xempiary and ethical mannet' (TIAA-CREF Summary Prospectus). Certain industries are already 

excluded from this fund, such as tobacco, gambling, and alcohoL. At a meeting arranged for us by TIAACREF, MSCllnc., the vendor selected by CREF to rate companies for inclusion or exclusion in the fund, 

acknowledged that U.S. health insurance companies lack transparency and that it is particularly 

challenging to rate these companies (meeting with Eric Fernald and staff of MSCI, 88 Pine St., NYC, 

15, 2010, from the March 30, 2012). A copy of the Staff Report for Chairman Rockefeller, dated April 


Committee on Commerce, Science, and Transportation's Office of Oversight and Investigations, called 

"Implementing Health Insurance Reform: New Medical Loss Ratio Information for Policymakers and 
Consumers," confirms this lack of transparency and was one of several documents included in the 

folders provided to MSCI and TIAA-CREF staff in our face-to-face meetings with each group, March 30th 

and April2ih, 2012, respectively. According to the Staff Report:
 

"Chairman Rockefeller sent letters to the 15 largest health insurers asking for more information 

about how these companies spend their policyholders' premium dollars... the largest for-profit 

loss ratio ...they informed health insurers resisted Chairman Rockefellets request for medical 


loss ratio information broken down by state and market segment 

was 'proprietary' and 'business sensitive.' These companies' failure to voluntarily provide this 

the Committee that medical 


loss ratios are extremely useful information was troubling because segmented medical 


information for individuals or small businesses trying to purchase health insurance in a 

particular market."(p. 2) 

For this reason, we take particular issue with the allegation that our proposal/contains false and 

misleading statements" and that our concern does not raise "social policý' issues. Certainly, the 

practices of health insurance companies, which significantly impact the lives of individuals and families, 

come under the category of "social policy." Congressional hearings on their behavior, most notably that 

of the common practice of "rescission" and denial of treatment, are known to have caused the 

premature death of individuals. Extensive investigative reporting by Lisa Girion of the LA TIMES has also
 

documented this practice as commonplace throughout the industry, in spite of millions of dollars in fines 

(see, for example, "Health Insurers' Rescission Practices are Exposed to More Scrutiny," Jan. 2, 2010, 

and "Health Insurers Refuse to Limit Rescission of Coverage," June 17, 2009, both in the LA TIMES). The
 

proposal references testimony given under oath by former executives who worked in the industry. 

Further, there is significant evidence of financial harm done by the health insurance industry, through 

rampant premium increases and so-called "cost-sharing." Research by Himmelstein, MD, et 01 from 

Harvard indicates that medical debt contributed to 62.1% of personal bankruptcies in 2007, and that
 

three quarters of those individuals had health insurance ("Medical Bankruptcy in the United States, 

2007: Results of a National Study," The American Journal of Medicine, Vol xx, No x, 2009). 

Finally, we do not agree with Mr. Rollock's second premise that "the essential objectives ofthe Proposal 

already have been substantially implemented." Frankly, we see no indication of this. 

Your attention is greatly appreciated as you formulate your decision regarding the legitimacy of our 

proposaL. 

Sincerely, 

~.~ 

Sandra M. Fox
 

Cc: Rev. Dr. Johanna W.H.van Wijk-Bos; Phillip Rollock 

Attachment: Copy of Shareholder Proposal 
PROPOSAL OF SHAREHOLDER'S RESOLUTION TO TIAA-CREF 

RE: CREF-SOCIAL CHOICE HOLDINGS IN HEALTH INSURANCE COMPANIES 

Whereas, we and many other TIAA-CREF participants with holdings in CREF-Social Choice believe that 

these funds should be invested in socially responsible companies that do not routinely harm individuals 

and are "managed in an exemplary and ethical mannet' (the latter is one of five social criteria listed in 

the TIAA-CREF Summary Prospectus as factors guiding fund inclusion); 

Whereas the inclusion of Aetna, CIGNA, Coventry Health Care, Humana, and Wellpoint violates these 

expectations; 

Whereas, there is ample evidence that the health insurance industry in this country routinely harms 

individuals and is rife with unethical behavior, as documented by Linda Peeno, M.D., who as a former 

medical reviewer testified about the harmful and unethical practices of the health insurance industry in 

1996 and again on September 16, 2009, before the Oversight and Government Reform Committee; 

Whereas, additional testimony has been provided by Wendell Potter, a former executive at both 

Humana and CIGNA, who wrote about the practices of these companies in his 2010 book Deadly Spin: 

An Insurance Company Insider Speaks Out on How Corporate PR is Kil/ing Health Care and Deceiving 

Americans; 

Whereas, Potter left CIGNA in 2008 after 20 years in the industry and testified to a U.S. Senate 

Commerce, Science, and Transportation Committee on June 24, 2009 that "insurance companies make 

promises they have no intention of keeping...f1out regulations designed to protect consumers... make it 

nearly impossible to understand-or even obtain-information needed by consumers... routinely cancel 

the coverage of policy-holders who get sick, and ...'purge' small businesses when employees' medical 

claims exceed what underwriters expected (p. 11)"; 

Health Group, and Whereas, on June 17, 2009, health insurance executives from WellPoint, United 


Assurant testified before the U.S. House Subcommittee on Oversight and not only admitted to their 

company's practice of rescission, or cancelling people's insurance when they become very ill, but 

refused to stop the practice; 

Whereas, health insurance companies make money by denying coverage, raising premiums, and 

increasing out-of-pocket costs, and spend 15-30% of the healthcare dollar on administrative overhead 

(including profit, exorbitant executive salaries, and marketing costs) compared to less than 2% for 

traditional Medicare; 

Whereas, these practices result in spiraling healthcare costs, worsening health, premature loss of life, 

and bankruptcy for countless Americans; 

Whereas, given the injustices perpetrated by this industry, it is no surprise that a majority of Americans 

support a Medicare for All system (Kaiser Health Tracking Poll, July 2009); 
Whereas, a single-payer, Improved Medicare for All system would provide excellent coverage to all by 

taking the private health insurance companies out of the equation and putting the needs of patients 

before profit; 

THEREFORE BE IT RESOLVED that the participants request that TIAA-CREF exdud~,health insurance
 

companies from the portfolio fund of CREF-Spcial Choice, in accordance with reasonable expectations 

for socially responsible investing. 

Submitted by:

¡;J-~-~ 'ISandra M. Fox

ijk-Bos ÕìV i_it:'/O 

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