California tax officials slammed Blue Shield, a nonprofit health insurer, for stockpiling and for failing to offer more affordable coverage or other public benefits.

The California Franchise Tax Board cited the above mentioned reason for revoking Blue Shield’s state tax exemption last year, according to documents related to the audit reviewed by The Times.

The details about the audit so far were kept secret because the insurer and tax board refused to make the audit and related records public.

The state auditors found that the insurer’s operations were found to be indistinguishable from those of its for-profit healthcare competitors. Therefore they decided to strip off the insurer from the tax break nit has been enjoying since it was founded in 1939.

The insurer giant does not advance social welfare, which is considered the key test for preserving its tax exemption, according to the records.

Tax board officials Christie Maddox and Eddie Murillo-Corona in a 16-page report sent June 3, 2014 wrote, “Blue Shield is not operating exclusively for the promotion of civic betterment or social welfare”.

Since the revocation became public, Blue Shield has faced increasing scrutiny from regulators, lawmakers and consumer groups over its massive financial reserves and its proposed purchase of a Medicaid insurer for $1.2 billion.

Blue Shield is the state’s third-largest health insurer with 3.4 million customers, 5,000 employees and $13.6 billion in revenue last year.

Paul Markovich, Blue Shield’s chief executive, defended its efforts to ensure quality affordable care for all Californians.