The former Utah governor and current Environmental Protection Agency chief faces two Senate confirmation hearings early next year - one before the Health, Education, Labor and Pension Committee and another in the Senate Finance Committee.

Members of the two committees with overlapping jurisdictions may question Leavitt about potential conflicts arising from Leavitt influencing federal health policies that could enhance the insurance industry.

Federal law prohibits executive branch employees from participating personally and substantially in any decision that could have a direct effect on their own or their family's financial interests. Leavitt has a one-seventh share of the family-held Leavitt Group Enterprises, the nation's 27th largest insurance broker founded in Cedar City by his father Dixie in 1952.

Leavitt has not been directly involved in the operation of the business since he stepped down as president and was elected governor in 1992, partly with the help of tens of thousands of dollars in contributions from Leavitt-affiliated insurance agencies. But in the personal financial disclosure he filed with the Office of Government Ethics (OGE) last year, Leavitt valued his stake between $5 million and $25 million. He was paid $134,125 in dividends on his $1.1 million share of annual earnings last year.

The company owns a chain of 100 agencies around the country that wrote $550 million in premiums last year, including home and business insurance polices for medical and dental expenses, long-term care, medical malpractice, Medicare supplemental coverage, workers' compensation and other health care needs.

Demand for those insurance plans could be affected by federal policies Leavitt would put into practice as head of the government agency responsible for national public health.

Before the Senate committees can start confirmation hearings, he will have to address any OGE concerns over the potential conflict, says the former top ethics officer for the federal government.

Stephen Potts, chairman of the Ethics Research Center, said ''it's a possibility'' that Leavitt could be required to sell off his share of the family business in order to serve as HHS Secretary.

''Certainly there is enough that must be discussed in terms of the type of the family business, in that it's involved in things that are topics that are regulated by HHS and where HHS policy is crucially important,'' said Potts, who served from 1990 to 2000 as director of OGE. ''Since some of his holdings are privately held family interests, that might present a somewhat difficult problem to solve,'' Potts added.

OGE agreements usually require nominees to divest publicly held securities - such as the shares Leavitt holds in four pharmaceutical and medical device firms. But Potts said the options are more limited for family held trusts.

Leavitt could put his interest in a ''lind'' trust, where an independent executor has full discretion over the assets, but Potts said then Leavitt would be prohibited from acting on anything at HHS that could impact the interest of the family insurance company until the trustee disposed of it.

And divesting a share of a family held trust ''has proven to be pretty sticky in the past,'' said Potts. Other members of the trust often don't want to buy out the other family member's share and they are not keen on seeing the share sold to an outsider.

Leavitt could seek a waiver from OGE to avoid selling off his share if federal ethics officers sign off on the argument that his decisions at the agency are so broad that the Leavitt Group would not receive a substantial direct benefit.

Ron Pollack, director of the national health care consumers group Families USA, said the potential conflict adds to his organization's concern that Leavitt is going to reduce access to federal health care programs for the poor by cutting Medicaid funding.

''There's no doubt Governor Leavitt will have to address satisfactorily during his confirmation that there won't be a real or apparent conflict,'' said Pollack.

Representatives of the nation's health care insurance companies don't share concerns of potential impartiality and say Leavitt's experience with their industry make him uniquely qualified for the HHS post.

"I don't see it because the policy questions are decided by Congress and the Secretary is the implementer," said Karen Ignani, president of America's Health Insurance Plans. The association represents 1,300 companies that offer various health care insurance plans, including supplements to Medicare, a massive program that Leavitt could be forced to drastically cut in order to meet President Bush's goal of halving the deficit.

Of the Leavitt Group's $76 million in annual revenues, company officials have said less than 1 percent - $760,000 - comes from premiums on Medicare supplemental insurance or "Medigap" policies. Such insurance plans are designed for people over 65 to supplement their Medicare benefits by paying for certain services and out-of-pocket costs that are not completely covered by the federal program.

AARP is the biggest provider of supplemental Medicare insurance and Ignani estimates 10 million people have such coverage.

But Ignani believes there is little chance that policy decisions would reduce Medicare coverage to create more demand for such supplemental insurance plans in the future.

"Congress is on a different path in that they are expanding Medicare coverage, not just with the prescription drug benefit but now with covering physicals and some preventative services," she said. "If you are a supplemental carrier, you begin to think of new services to offer as Medicare expands."