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EXHIBIT 10.04

BLUE SHIELD
CONTROLLED AFFILIATE LICENSE AGREEMENT
(Includes revisions adopted by Member Plans through their November 16, 2000,
meeting)

    This Agreement by and among Blue Cross and Blue Shield Association ("BCBSA")
and Blue Cross and Blue Shield of Georgia, Inc. ("Controlled Affiliate"), a
Controlled Affiliate of the Blue Cross Plan(s), known as WellPoint Health
Networks Inc. ("Plan"), which is also a Party signatory hereto.

    WHEREAS, BCBSA is the owner of the BLUE SHIELD and BLUE SHIELD Design
service marks;

    WHEREAS, Plan and Controlled Affiliate desire that the latter be entitled to
use the BLUE SHIELD and BLUE SHIELD Design service marks (collectively the
"Licensed Marks") as service marks and be entitled to use the term BLUE SHIELD
in a trade name ("Licensed Name");

    NOW THEREFORE, in consideration of the foregoing and the mutual agreements
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

    1.  GRANT OF LICENSE

    Subject to the terms and conditions of this Agreement, BCBSA hereby grants
to Controlled Affiliate the right to use the Licensed Marks and Name in
connection with, and only in connection with: (i) health care plans and related
services, as defined in BCBSA's License Agreement with Plan, and administering
the non-health portion of workers' compensation insurance, and (ii) underwriting
the indemnity portion of workers' compensation insurance, provided that
Controlled Affiliate's total premium revenue comprises less than 15 percent of
the sponsoring Plan's net subscription revenue.

    This grant of rights is non-exclusive and is limited to the Service Area
served by the Plan. Controlled Affiliate may use the Licensed Marks and Name in
its legal name on the following conditions: (i) the legal name must be approved
in advance, in writing, by BCBSA; (ii) Controlled Affiliate shall not do
business outside the Service Area under any name or mark; and (iii) Controlled
Affiliate shall not use the Licensed Marks and Name, or any derivative thereof,
as part of any name or symbol used to identify itself in any securities market.
Controlled Affiliate may use the Licensed Marks and Name in its Trade Name only
with the prior, written, consent of BCBSA.

    2.  QUALITY CONTROL

    A.  Controlled Affiliate agrees to use the Licensed Marks and Name only in
connection with the licensed services and further agrees to be bound by the
conditions regarding quality control shown in attached Exhibit A as they may be
amended by BCBSA from time-to-time.

Amended as of November 16, 2000

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    B.  Controlled Affiliate agrees to comply with all applicable federal, state
and local laws.

    C.  Controlled Affiliate agrees that it will provide on an annual basis (or
more often if reasonably required by Plan or by BCBSA) a report or reports to
Plan and BCBSA demonstrating Controlled Affiliate's compliance with the
requirements of this Agreement including but not limited to the quality control
provisions of this paragraph and the attached Exhibit A.

    D.  Controlled Affiliate agrees that Plan and/or BCBSA may, from
time-to-time, upon reasonable notice, review and inspect the manner and method
of Controlled Affiliate's rendering of service and use of the Licensed Marks and
Name.

    E.  As used herein, a Controlled Affiliate is defined as an entity organized
and operated in such a manner, that it meets the following requirements:

(1)  A Plan or Plans authorized to use the Licensed Marks in the Service Area of
the Controlled Affiliate pursuant to separate License Agreement(s) with BCBSA,
other than such Controlled Affiliate's License Agreement(s), (the "Controlling
Plan(s)"), must have the legal authority directly or indirectly through
wholly-owned subsidiaries to select members of the Controlled Affiliate's
governing body having not less than 50% voting control thereof and to:

    (a) prevent any change in the articles of incorporation, bylaws or other
establishing or governing documents of the Controlled Affiliate with which the
Controlling Plan(s) do(es) not concur;

    (b) exercise control over the policy and operations of the Controlled
Affiliate at least equal to that exercised by persons or entities (jointly or
individually) other than the Controlling Plan(s); and

Notwithstanding anything to the contrary in (a) through (b) hereof, the
Controlled Affiliate's establishing or governing documents must also require
written approval by the Controlling Plan(s) before the Controlled Affiliate can:

(i)change its legal and/or trade names;

(ii)change the geographic area in which it operates;

(iii)change any of the type(s) of businesses in which it engages;

(iv)create, or become liable for by way of guarantee, any indebtedness, other
than indebtedness arising in the ordinary course of business;

(v)sell any assets, except for sales in the ordinary course of business or sales
of equipment no longer useful or being replaced;

(vi)make any loans or advances except in the ordinary course of business;

(vii)enter into any arrangement or agreement with any party directly or
indirectly affiliated with any of the owners or persons or entities with the
authority to select or appoint members or board members of the Controlled
Affiliate, other than the Plan or Plans (excluding owners of stock holdings of
under 5% in a publicly traded Controlled Affiliate);

(viii)conduct any business other than under the Licensed Marks and Name;

(ix)take any action that any Controlling Plan or BCBSA reasonably believes will
adversely affect the Licensed Marks and Name.

In addition, a Plan or Plans directly or indirectly through wholly owned
subsidiaries shall own at least 50% of any for-profit Controlled Affiliate.

Or

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(2)  A Plan or Plans authorized to use the Licensed Marks in the Service Area of
the Controlled Affiliate pursuant to separate License Agreement(s) with BCBSA,
other than such Controlled Affiliate's License Agreement(s), (the "Controlling
Plan(s)"), have the legal authority directly or indirectly through wholly-owned
subsidiaries to select members of the Controlled Affiliate's governing body
having more than 50% voting control thereof and to:

(a)prevent any change in the articles of incorporation, bylaws or other
establishing or governing documents of the Controlled Affiliate with which the
Controlling Plan(s) do(es) not concur;

(b)exercise control over the policy and operations of the Controlled Affiliate.

In addition, a Plan or Plans directly or indirectly through wholly-owned
subsidiaries shall own at least 50% of any for-profit Controlled Affiliate.

    3.  SERVICE MARK USE

    A.  Controlled Affiliate recognizes the importance of a comprehensive
national network of independent BCBSA licensees which are committed to
strengthening the Licensed Marks and Name. The Controlled Affiliate further
recognizes that its actions within its Service Area may affect the value of the
Licensed Marks and Name nationwide.

    B.  Controlled Affiliate shall at all times make proper service mark use of
the Licensed Marks and Name, including but not limited to use of such symbols or
words as BCBSA shall specify to protect the Licensed Marks and Name and shall
comply with such rules (generally applicable to Controlled Affiliates licensed
to use the Licensed Marks and Name) relative to service mark use, as are issued
from time-to-time by BCBSA. Controlled Affiliate recognizes and agrees that all
use of the Licensed Marks and Name by Controlled Affiliate shall inure to the
benefit of BCBSA.

    C.  Controlled Affiliate may not directly or indirectly use the Licensed
Marks and Name in a manner that transfers or is intended to transfer in the
Service Area the goodwill associated therewith to another mark or name, nor may
Controlled Affiliate engage in activity that may dilute or tarnish the unique
value of the Licensed Marks and Name.

    D.  If Controlled Affiliate meets the standards of 2E(1) but not 2E(2) above
and any of Controlled Affiliate's advertising or promotional material is
reasonably determined by BCBSA and/or the Plan to be in contravention of rules
and regulations governing the use of the Licensed Marks and Name, Controlled
Affiliate shall for ninety (90) days thereafter obtain prior approval from BCBSA
of advertising and promotional efforts using the Licensed Marks and Name,
approval or disapproval thereof to be forthcoming within five (5) business days
of receipt of same by BCBSA or its designee. In all advertising and promotional
efforts, Controlled Affiliate shall observe the Service Area limitations
applicable to Plan.

    E.  Controlled Affiliate shall use its best efforts in the Service Area to
promote and build the value of the Licensed Marks and Name.

    4.  SUBLICENSING AND ASSIGNMENT

    Controlled Affiliate shall not, directly or indirectly, sublicense,
transfer, hypothecate, sell, encumber or mortgage, by operation of law or
otherwise, the rights granted hereunder and any such act shall be voidable at
the sole option of Plan or BCBSA. This Agreement and all rights and duties
hereunder are personal to Controlled Affiliate.

    5.  INFRINGEMENT

    Controlled Affiliate shall promptly notify Plan and Plan shall promptly
notify BCBSA of any suspected acts of infringement, unfair competition or
passing off that may occur in relation to the Licensed Marks and Name.
Controlled Affiliate shall not be entitled to require Plan or BCBSA to take

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any actions or institute any proceedings to prevent infringement, unfair
competition or passing off by third parties. Controlled Affiliate agrees to
render to Plan and BCBSA, without charge, all reasonable assistance in
connection with any matter pertaining to the protection of the Licensed Marks
and Name by BCBSA.

    6.  LIABILITY INDEMNIFICATION

    Controlled Affiliate and Plan hereby agree to save, defend, indemnify and
hold BCBSA harmless from and against all claims, damages, liabilities and costs
of every kind, nature and description (except those arising solely as a result
of BCBSA's negligence) that may arise as a result of or related to Controlled
Affiliate's rendering of services under the Licensed Marks and Name.

    7.  LICENSE TERM

    A.  Except as otherwise provided herein, the license granted by this
Agreement shall remain in effect for a period of one (1) year and shall be
automatically extended for additional one (1) year periods unless terminated
pursuant to the provisions herein.

    B.  This Agreement and all of Controlled Affiliate's rights hereunder shall
immediately terminate without any further action by any party or entity in the
event that Plan ceases to be authorized to use the Licensed Marks and Name.

    C.  Notwithstanding any other provision of this Agreement, this license to
use the Licensed Marks and Name may be forthwith terminated by the Plan or the
affirmative vote of the majority of the Board of Directors of BCBSA present and
voting at a special meeting expressly called by BCBSA for the purpose on ten
(10) days written notice to the Plan advising of the specific matters at issue
and granting the Plan an opportunity to be heard and to present its response to
Member Plans for: (1) failure to comply with any applicable minimum capital or
liquidity requirement under the quality control standards of this Agreement; or
(2) failure to comply with the "Organization and Governance" quality control
standard of this Agreement; or (3) impending financial insolvency; or (4) for a
Smaller Controlled Affiliate (as defined in Exhibit A), failure to comply with
any of the applicable requirements of Standards 2, 3, 4, 5 or 7 of attached
Exhibit A; or (5) the pendency of any action instituted against the Controlled
Affiliate seeking its dissolution or liquidation of its assets or seeking
appointment of a trustee, interim trustee, receiver or other custodian for any
of its property or business or seeking the declaration or establishment of a
trust for any of its property or business, unless this Controlled Affiliate
License Agreement has been earlier terminated under paragraph 7(e); or
(6) failure by a Controlled Affiliate that meets the standards of 2E(1) but not
2E(2) above to obtain BCBSA's written consent to a change in the identity of any
owner, in the extent of ownership, or in the identity of any person or entity
with the authority to select or appoint members or board members, provided that
as to publicly traded Controlled Affiliates this provision shall apply only if
the change affects a person or entity that owns at least 5% of the Controlled
Affiliate's stock before or after the change; or (7) such other reason as is
determined in good faith immediately and irreparably to threaten the integrity
and reputation of BCBSA, the Plans, any other licensee including Controlled
Affiliate and/or the Licensed Marks and Name.

    D.  Except as otherwise provided in Paragraphs 7(B), 7(C) or 7(E) herein,
should Controlled Affiliate fail to comply with the provisions of this Agreement
and not cure such failure within thirty (30) days of receiving written notice
thereof (or commence a cure within such thirty day period and continue diligent
efforts to complete the cure if such curing cannot reasonably be completed
within such thirty day period) BCBSA or the Plan shall have the right to issue a
notice that the Controlled Affiliate is in a state of noncompliance. If a state
of noncompliance as aforesaid is undisputed by the Controlled Affiliate or is
found to exist by a mandatory dispute resolution panel and is uncured as
provided above, BCBSA shall have the right to seek judicial enforcement of the
Agreement or to issue a notice of termination thereof. Notwithstanding any other
provisions of this Agreement, any disputes

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as to the termination of this License pursuant to Paragraphs 7(B), 7(C) or 7(E)
of this Agreement shall not be subject to mediation and mandatory dispute
resolution. All other disputes between BCBSA, the Plan and/or Controlled
Affiliate shall be submitted promptly to mediation and mandatory dispute
resolution. The mandatory dispute resolution panel shall have authority to issue
orders for specific performance and assess monetary penalties. Except, however,
as provided in Paragraphs 7(B) and 7(E) of this Agreement, this license to use
the Licensed Marks and Name may not be finally terminated for any reason without
the affirmative vote of a majority of the present and voting members of the
Board of Directors of BCBSA.

    E.  This Agreement and all of Controlled Affiliate's rights hereunder shall
immediately terminate without any further action by any party or entity in the
event that:

    (1) Controlled Affiliate shall no longer comply with item 2(E) above;

    (2) Appropriate dues, royalties and other payments for Controlled Affiliate
pursuant to paragraph 9 hereof, which are the royalties for this License
Agreement, are more than sixty (60) days in arrears to BCBSA; or

    (3) Any of the following events occur: (i) a voluntary petition shall be
filed by Controlled Affiliate seeking bankruptcy, reorganization, arrangement
with creditors or other relief under the bankruptcy laws of the United States or
any other law governing insolvency or debtor relief, or (ii) an involuntary
petition or proceeding shall be filed against Controlled Affiliate seeking
bankruptcy, reorganization, arrangement with creditors or other relief under the
bankruptcy laws of the United States or any other law governing insolvency or
debtor relief and such petition or proceeding is consented to or acquiesced in
by Controlled Affiliate or is not dismissed within sixty (60) days of the date
upon which the petition or other document commencing the proceeding is served
upon the Controlled Affiliate, or (iii) an order for relief is entered against
Controlled Affiliate in any case under the bankruptcy laws of the United States,
or Controlled Affiliate is adjudged bankrupt or insolvent as those terms are
defined in the Uniform Commercial Code as enacted in the State of Illinois by
any court of competent jurisdiction, or (iv) Controlled Affiliate makes a
general assignment of its assets for the benefit of creditors, or (v) the
Department of Insurance or other regulatory agency assumes control of Controlled
Affiliate or delinquency proceedings (voluntary or involuntary) are instituted,
or (vi) an action is brought by Controlled Affiliate seeking its dissolution or
liquidation of its assets or seeking the appointment of a trustee, interim
trustee, receiver or other custodian for any of its property or business, or
(vii) an action is instituted by any governmental entity or officer against
Controlled Affiliate seeking its dissolution or liquidation of its assets or
seeking the appointment of a trustee, interim trustee, receiver or other
custodian for any of its property or business and such action is consented to or
acquiesced in by Controlled Affiliate or is not dismissed within one hundred
thirty (130) days of the date upon which the pleading or other document
commencing the action is served upon the Controlled Affiliate, provided that if
the action is stayed or its prosecution is enjoined, the one hundred thirty
(130) day period is tolled for the duration of the stay or injunction, and
provided further, that the Association's Board of Directors may toll or extend
the 130 day period at any time prior to its expiration, or (viii) a trustee,
interim trustee, receiver or other custodian for any of Controlled Affiliate's
property or business is appointed or the Controlled Affiliate is ordered
dissolved or liquidated. Notwithstanding any other provision of this Agreement,
a declaration or a request for declaration of the existence of a trust over any
of the Controlled Affiliate's property or business shall not in itself be deemed
to constitute or seek appointment of a trustee, interim trustee, receiver or
other custodian for purposes of subparagraphs 7(e)(3)(vii) and (viii) of this
Agreement.

    F.  Upon termination of this Agreement for cause or otherwise, Controlled
Affiliate agrees that it shall immediately discontinue all use of the Licensed
Marks and Name, including any use in its trade name.

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    G.  Upon termination of this Agreement, Controlled Affiliate shall
immediately notify all of its customers that it is no longer a licensee of BCBSA
and, if directed by the Association's Board of Directors, shall provide
instruction on how the customer can contact BCBSA or a designated licensee to
obtain further information on securing coverage. The notification required by
this paragraph shall be in writing and in a form approved by BCBSA. The BCBSA
shall have the right to audit the terminated entity's books and records to
verify compliance with this paragraph.

    H.  In the event this Agreement terminates pursuant to 7(b) hereof, or in
the event the Controlled Affiliate is a Larger Controlled Affiliate (as defined
in Exhibit A), upon termination of this Agreement, the provisions of
Paragraph 7.G. shall not apply and the following provisions shall apply:

    (1) The Controlled Affiliate shall send a notice through the U.S. mails,
with first class postage affixed, to all individual and group customers,
providers, brokers and agents of products or services sold, marketed,
underwritten or administered by the Controlled Affiliate under the Licensed
Marks and Name. The form and content of the notice shall be specified by BCBSA
and shall, at a minimum, notify the recipient of the termination of the license,
the consequences thereof, and instructions for obtaining alternate products or
services licensed by BCBSA. This notice shall be mailed within 15 days after
termination.

    (2) The Controlled Affiliate shall deliver to BCBSA within five days of a
request by BCBSA a listing of national accounts in which the Controlled
Affiliate is involved (in a control, participating or servicing capacity),
identifying the national account and the Controlled Affiliate's role therein.

    (3) Unless the cause of termination is an event respecting BCBSA stated in
paragraph 15(a) or (b) of the Plan's license agreement with BCBSA to use the
Licensed Marks and Name, the Controlled Affiliate, the Plan, and any other
Licensed Controlled Affiliates of the Plan shall be jointly liable for payment
to BCBSA of an amount equal to $25 multiplied by the number of Licensed
Enrollees of the Controlled Affiliate; provided that if any other Plan is
permitted by BCBSA to use marks or names licensed by BCBSA in the Service Area
established by this Agreement, the payment shall be multiplied by a fraction,
the numerator of which is the number of Licensed Enrollees of the Controlled
Affiliate, the Plan, and any other Licensed Controlled Affiliates and the
denominator of which is the total number of Licensed Enrollees in the Service
Area. Licensed Enrollee means each and every person and covered dependent who is
enrolled as an individual or member of a group receiving products or services
sold, marketed or administered under marks or names licensed by BCBSA as
determined at the earlier of (i) the end of the last fiscal year of the
terminated entity which ended prior to termination or (ii) the fiscal year which
ended before any transactions causing the termination began. Notwithstanding the
foregoing, the amount payable pursuant to this subparagraph H. (3) shall be due
only to the extent that, in BCBSA's opinion, it does not cause the net worth of
the Controlled Affiliate, the Plan or any other Licensed Controlled Affiliates
of the Plan to fall below 100% of the capital benchmark formula, or its
equivalent under any successor formula, as set forth in the applicable financial
responsibility standards established by BCBSA (provided such equivalent is
approved for purposes of this sub paragraph by the affirmative vote of
three-fourths of the Plans and three-fourths of the total then current weighted
vote of all the Plans); measured as of the date of termination, and adjusted for
the value of any transactions not made in the ordinary course of business. This
payment shall not be due in connection with transactions exclusively by or among
Plans or their affiliates, including reorganizations, combinations or mergers,
where the BCBSA Board of Directors determines that the license termination does
not result in a material diminution in the number of Licensed Enrollees or the
extent of their coverage.

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    (4) BCBSA shall have the right to audit the books and records of the
Controlled Affiliate, the Plan, and any other Licensed Controlled Affiliates of
the Plan to verify compliance with this paragraph 7.H.

    (5) As to a breach of 7.H.(1), (2), (3) or (4), the parties agree that the
obligations are immediately enforceable in a court of competent jurisdiction. As
to a breach of 7.H.(1), (2) or (4) by the Controlled Affiliate, the parties
agree there is no adequate remedy at law and BCBSA is entitled to obtain
specific performance.

    I.  In the event the Controlled Affiliate is a Smaller Controlled Affiliate
(as defined in Exhibit A), the Controlled Affiliate agrees to be jointly liable
for the amount described in H.3. hereof upon termination of the BCBSA license
agreement of any Larger Controlled Affiliate of the Plan.

    J.  BCBSA shall be entitled to enjoin the Controlled Affiliate or any
related party in a court of competent jurisdiction from entry into any
transaction which would result in a termination of this Agreement unless the
Plan's license from BCBSA to use the Licensed Marks and Names has been
terminated pursuant to 10(d) of the Plan's license agreement upon the required
6 month written notice.

    K.  BCBSA acknowledges that it is not the owner of assets of the Controlled
Affiliate.

    L.  In the event that the Plan has more than 50 percent voting control of
the Controlled Affiliate under Paragraph 2(E)(2) above and is a Larger
Controlled Affiliate (as defined in Exhibit A), then the vote called for in
Paragraphs 7(C) and 7(D) above shall require the affirmative vote of
three-fourths of the Plans and three-fourths of the total then current weighted
vote of all the Plans.

    8.  DISPUTE RESOLUTION

    The parties agree that any disputes between them or between or among either
of them and one or more Plans or Controlled Affiliates of Plans that use in any
manner the Blue Shield and Blue Shield Marks and Name are subject to the
Mediation and Mandatory Dispute Resolution process attached to and made a part
of Plan's License from BCBSA to use the Licensed Marks and Name as Exhibits 5,
5A and 5B as amended from time-to-time, which documents are incorporated herein
by reference as though fully set forth herein.

    9.  LICENSE FEE

    Controlled Affiliate will pay to BCBSA a fee for this License determined
pursuant to the formula(s) set forth in Exhibit B.

    10.  JOINT VENTURE

    Nothing contained in the Agreement shall be construed as creating a joint
venture, partnership, agency or employment relationship between Plan and
Controlled Affiliate or between either and BCBSA.

Amended as of March 11, 1999

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    11.  NOTICES AND CORRESPONDENCE

    Notices regarding the subject matter of this Agreement or breach or
termination thereof shall be in writing and shall be addressed in duplicate to
the last known address of each other party, marked respectively to the attention
of its President and, if any, its General Counsel.

    12.  COMPLETE AGREEMENT

    This Agreement contains the complete understandings of the parties in
relation to the subject matter hereof. This Agreement may only be amended by the
affirmative vote of three-fourths of the Plans and three-fourths of the total
then current weighted vote of all the Plans as officially recorded by the BCBSA
Corporate Secretary.

    13.  SEVERABILITY

    If any term of this Agreement is held to be unlawful by a court of competent
jurisdiction, such findings shall in no way affect the remaining obligations of
the parties hereunder and the court may substitute a lawful term or condition
for any unlawful term or condition so long as the effect of such substitution is
to provide the parties with the benefits of this Agreement.

    14.  NONWAIVER

    No waiver by BCBSA of any breach or default in performance on the part of
Controlled Affiliate or any other licensee of any of the terms, covenants or
conditions of this Agreement shall constitute a waiver of any subsequent breach
or default in performance of said terms, covenants or conditions.

    14A.  VOTING

    For all provisions of this Agreement referring to voting, the term "Plans"
shall mean all entities licensed under the Blue Cross License Agreement and/or
the Blue Shield License Agreement, and in all votes of the Plans under this
Agreement the Plans shall vote together. For weighted votes of the Plans, the
Plan shall have a number of votes equal to the number of weighted votes (if any)
that it holds as a Blue Cross Plan plus the number of weighted votes (if any)
that it holds as a Blue Shield Plan. For all other votes of the Plans, the Plan
shall have one vote. For all questions requiring an affirmative three-fourths
weighted vote of the Plans, the requirement shall be deemed satisfied with a
lesser weighted vote unless six (6) or more Plans fail to cast weighted votes in
favor of the question.

Amended as of June 16, 2000

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THIS PAGE IS INTENTIONALLY BLANK.

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    15.  GOVERNING LAW

    This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Illinois.

    16.  HEADINGS

    The headings inserted in this agreement are for convenience only and shall
have no bearing on the interpretation hereof.

    IN WITNESS WHEREOF, the parties have caused this License Agreement to be
executed and effective as of the date of last signature written below.

Blue Cross and Blue Shield of Georgia, Inc.:    
By:
 
/s/ HUGH J. STEDMAN   

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Hugh J. Stedman
 
 
Date:
 
3-15-01

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WellPoint Health Networks Inc.:

 

 
By:
 
/s/ LEONARD D. SCHAEFFER   

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Leonard D. Schaeffer
 
 
Date:
 
3-15-01

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BLUE CROSS AND BLUE SHIELD ASSOCIATION

 

 
By:
 
/s/ ROGER G. WILSON   

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Roger G. Wilson
 
 
Date:
 
3-15-01

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EXHIBIT A

CONTROLLED AFFILIATE LICENSE STANDARDS

    November 2000

PREAMBLE

    The standards for licensing Controlled Affiliates are established by BCBSA
and are subject to change from time-to-time upon the affirmative vote of
three-fourths (3/4) of the Plans and three-fourths (3/4) of the total weighted
vote. Each licensed Plan is required to use a standard Controlled Affiliate
license form provided by BCBSA and to cooperate fully in assuring that the
licensed Controlled Affiliate maintains compliance with the license standards.

    The Controlled Affiliate License provides a flexible vehicle to accommodate
the potential range of health and workers' compensation related products and
services Plan Controlled Affiliates provide. The Controlled Affiliate License
collapses former health Controlled Affiliate licenses (HCC, HMO, PPO, TPA, and
IDS) into a single license using the following business-based criteria to
provide a framework for license standards:

•Percent of Controlled Affiliate controlled by parent: Greater than 50 percent
or 50 percent?

•Risk assumption: yes or no?

•Medical care delivery: yes or no?

•Size of the Controlled Affiliate: If the Controlled Affiliate has health or
workers' compensation administration business, does such business constitute
15 percent or more of the parent's and other licensed health subsidiaries'
contract enrollment?

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EXHIBIT A (continued)

    For purposes of definition:

•A "smaller Controlled Affiliate:" (1) comprises less than fifteen percent (15%)
of Plan's and its licensed Controlled Affiliates' total contract enrollment (as
reported on the BCBSA Quarterly Enrollment Report, excluding rider and
freestanding coverage, and treating an entity seeking licensure as licensed);*
or (2) underwrites the indemnity portion of workers' compensation insurance and
has total premium revenue less than 15 percent of the sponsoring Plan's net
subscription revenue.

•A "larger Controlled Affiliate" comprises fifteen percent (15%) or more of
Plan's and its licensed Controlled Affiliates' total contract enrollment (as
reported on the BCBSA Quarterly Enrollment Report, excluding rider and
freestanding coverage, and treating an entity seeking licensure as licensed.)*

    Changes in Controlled Affiliate status:

    If any Controlled Affiliate's status changes regarding: its Plan ownership
level, its risk acceptance or direct delivery of medical care, the Controlled
Affiliate shall notify BCBSA within thirty (30) days of such occurrence in
writing and come into compliance with the applicable standards within six
(6) months.

    If a smaller Controlled Affiliate's health and workers' compensation
administration business reaches or surpasses fifteen percent (15%) of the total
contract enrollment of the Plan and licensed Controlled Affiliates, the
Controlled Affiliate shall:

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EXHIBIT A (continued)

1.Within thirty (30) days, notify BCBSA of this fact in writing, including
evidence that the Controlled Affiliate meets the minimum liquidity and capital
(BCBSA "Managed Care Organizations Risk-Based Capital (MCO-RBC)" as defined by
the NAIC and state-established minimum reserve) requirements of the larger
Controlled Affiliate Financial Responsibility standard; and

2.Within six (6) months after reaching or surpassing the fifteen percent (15%)
threshold, demonstrate compliance with all license requirements for a larger
Controlled Affiliate.

    If a Controlled Affiliate that underwrites the indemnity portion of workers'
compensation insurance receives a change in rating or proposed change in rating,
the Controlled Affiliate shall notify BCBSA within 30 days of notification by
the external rating agency.

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*For purposes of this calculation,

    The numerator equals:

    Applicant Controlled Affiliate's contract enrollment, as defined in BCBSA's
Quarterly Enrollment Report (excluding rider and freestanding coverage).

    The denominator equals:

    Numerator PLUS Plan and all other licensed Controlled Affiliates' contract
enrollment, as reported in BCBSA's Quarterly Enrollment Report (excluding rider
and freestanding coverage).

    November 16, 2000

13

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EXHIBIT A (continued)

STANDARDS FOR LICENSED CONTROLLED AFFILIATES

    As described in Preamble section of Exhibit A to the Affiliate License
Agreement, each controlled affiliate seeking licensure must answer four
questions. Depending on the controlled affiliate's answers, certain standards
apply:

1. What percent of the controlled affiliate is controlled by the parent Plan?

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More than 50%   50%   100% and Primary Business is Government Non-Risk LOGO
[g68784.jpg]   LOGO [g68784.jpg]   LOGO [g68784.jpg] Standard 1A, 4   Standard
1B, 4   Standard 4*,10A

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* Applicable only if using the names and marks. IN ADDITION, 2. Is risk being
assumed?

--------------------------------------------------------------------------------

Yes   No

--------------------------------------------------------------------------------

 

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LOGO [g88136.jpg]   LOGO [g68784.jpg]   LOGO [g81688.jpg]   LOGO [g88136.jpg]  
LOGO [g68784.jpg]   LOGO [g81688.jpg] Controlled Affiliate underwrites any
indemnity portion of workers' compensation insurance   Controlled Affiliate
comprises less than 15% of total contract enrollment of Plan and its licensed
affiliates, and does not underwrite the indemnity portion of workers'
compensation insurance   Controlled Affiliate comprises greater than or equal to
15% of total contract enrollment of Plan and its licensed affiliates, and does
not underwrite the indemnity portion of workers' compensation insurance  
Controlled Affiliate comprises less than 15% of total contract enrollment of
Plan and its licensed affiliates   Controlled Affiliate comprises greater than
or equal to 15% of total contract enrollment of Plan and its licensed affiliates
  Controlled Affiliate's Primary Business is 15% of total contract Government
Non-Risk LOGO [g68784.jpg]   LOGO [g68784.jpg]   LOGO [g68784.jpg]   LOGO
[g68784.jpg]   LOGO [g68784.jpg]   LOGO [g68784.jpg] Standards 7A-7E   Standard
2
(Guidelines 1.1,1.2)   Standard 6H   Standard 2
(Guidelines 1.1,1.3)   Standard 6H   Standard 10B

--------------------------------------------------------------------------------

IN ADDITION, 3. Is medical care being directly provided?

--------------------------------------------------------------------------------

Yes   No LOGO [g68784.jpg]   LOGO [g68784.jpg] Standard 3A   Standard 3B

--------------------------------------------------------------------------------

IN ADDITION,

--------------------------------------------------------------------------------

4. If the controlled affiliate has health or workers' compensation
administration business, does such business comprise 15% or more of the total
contract enrollment of Plan and its licensed controlled affiliates?

--------------------------------------------------------------------------------

Yes   No

--------------------------------------------------------------------------------

 

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LOGO [g68784.jpg]   LOGO [g88136.jpg]   LOGO [g68784.jpg]   LOGO [g81688.jpg]
Standards 6A-6I   Controlled Affiliate is a former primary licensee   Controlled
Affiliate is not a former primary licensee   Controlled Affiliate's Primary
Business is Government Non-Risk             LOGO [g68784.jpg]   LOGO
[g68784.jpg]   LOGO [g68784.jpg]             Standards 5,8,9   Standards 5,8  
Standards 8, 10(C)

14

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EXHIBIT A (continued)

Standard 1—Organization and Governance

    1A.) The Standard for more than 50% Plan control is:

A Controlled Affiliate shall be organized and operated in such a manner that a
licensed Plan or Plans authorized to use the Licensed Marks in the Service Area
of the Controlled Affiliate pursuant to separate License Agreement(s) with
BCBSA, other than such Controlled Affiliate's License Agreement(s), (the
"Controlling Plan(s)"), have the legal authority, directly or indirectly through
wholly-owned subsidiaries: 1) to select members of the Controlled Affiliate's
governing body having more than 50% voting control thereof; and 2) to prevent
any change in the articles of incorporation, bylaws or other establishing or
governing documents of the Controlled Affiliate with which the Controlling
Plan(s) do(es) not concur; and 3) to exercise control over the policy and
operations of the Controlled Affiliate. In addition, a Plan or Plans directly or
indirectly through wholly-owned subsidiaries shall own more than 50% of any
for-profit Controlled Affiliate.

1B.) The Standard for 50% Plan control is:

A Controlled Affiliate shall be organized and operated in such a manner that a
licensed Plan or Plans authorized to use the Licensed Marks in the Service Area
of the Controlled Affiliate pursuant to separate License Agreement(s) with
BCBSA, other than such Controlled Affiliate's License Agreement(s), (the
"Controlling Plan(s)"), have the legal authority, directly or indirectly through
wholly-owned subsidiaries:

1)to select members of the Controlled Affiliate's governing body having not less
than 50% voting control thereof; and

2)to prevent any change in the articles of incorporation, bylaws or other
establishing or governing documents of the Controlled Affiliate with which the
Controlling Plan(s) do(es) not concur; and

3)to exercise control over the policy and operations of the Controlled Affiliate
at least equal to that exercised by persons or entities (jointly or
individually) other than the Controlling Plan(s).

15

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    Notwithstanding anything to the contrary in 1) through 3) hereof, the
Controlled Affiliate's establishing or governing documents must also require
written approval by the Controlling Plan(s) before the Controlled Affiliate can:

•change the geographic area in which it operates

•change its legal and/or trade names

•change any of the types of businesses in which it engages

•create, or become liable for by way of guarantee, any indebtedness, other than
indebtedness arising in the ordinary course of business

•sell any assets, except for sales in the ordinary course of business or sales
of equipment no longer useful or being replaced

•make any loans or advances except in the ordinary course of business

•enter into any arrangement or agreement with any party directly or indirectly
affiliated with any of the owners or persons or entities with the authority to
select or appoint members or board members of the Controlled Affiliate, other
than the Plan or Plans (excluding owners of stock holdings of under 5% in a
publicly traded Controlled Affiliate)

•conduct any business other than under the Licensed Marks and Name

•take any action that any Controlling Plan or BCBSA reasonably believes will
adversely affect the Licensed Marks and Name.

    In addition, a Plan or Plans directly or indirectly through wholly-owned
subsidiaries shall own at least 50% of any for-profit Controlled Affiliate.

16

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EXHIBIT A (continued)

Standard 2—Financial Responsibility

    A Controlled Affiliate shall be operated in a manner that provides
reasonable financial assurance that it can fulfill all of its contractual
obligations to its customers. If a risk-assuming Controlled Affiliate ceases
operations for any reason, Blue Cross and/or Blue Cross Plan coverage will be
offered to all Controlled Affiliate subscribers without exclusions, limitations
or conditions based on health status. If a nonrisk-assuming Controlled Affiliate
ceases operations for any reason, sponsoring Plan(s) will provide for services
to its (their) customers.

Standard 3—State Licensure/Certification

    3A.) The Standard for a Controlled Affiliate that employs, owns or contracts
on a substantially exclusive basis for medical services is:

    A Controlled Affiliate shall maintain unimpaired licensure or certification
for its medical care providers to operate under applicable state laws.

    3B.) The Standard for a Controlled Affiliate that does not employ, own or
contract on a substantially exclusive basis for medical services is:

    A Controlled Affiliate shall maintain unimpaired licensure or certification
to operate under applicable state laws.

Standard 4—Certain Disclosures

    A Controlled Affiliate shall make adequate disclosure in contracting with
third parties and in disseminating public statements of 1) the structure of the
Blue Cross and Blue Shield System; and 2) the independent nature of every
licensee; and 3) the Controlled Affiliate's financial condition.

Standard 5—Reports and Records for Certain Smaller Controlled Affiliates

    For a smaller Controlled Affiliate that does not underwrite the indemnity
portion of workers' compensation insurance, the Standard is:

17

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EXHIBIT A (continued)

    A Controlled Affiliate and/or its licensed Plan(s) shall furnish, on a
timely and accurate basis, reports and records relating to these Standards and
the License Agreements between BCBSA and Controlled Affiliate.

    Standard 6—Other Standards for Larger Controlled Affiliates

    Standards 6(A)—(I) that follow apply to larger Controlled Affiliates.

    Standard 6(A): Board of Directors

    A Controlled Affiliate Governing Board shall act in the interest of its
Corporation in providing cost-effective health care services to its customers. A
Controlled Affiliate shall maintain a governing Board, which shall control the
Controlled Affiliate, composed of a majority of persons other than providers of
health care services, who shall be known as public members. A public member
shall not be an employee of or have a financial interest in a health care
provider, nor be a member of a profession which provides health care services.

    Standard 6(B): Responsiveness to Customers

    A Controlled Affiliate shall be operated in a manner responsive to customer
needs and requirements.

    Standard 6(C): Participation in National Programs

    A Controlled Affiliate shall effectively and efficiently participate in each
national program as from time to time may be adopted by the Member Plans for the
purposes of providing portability of membership between the licensees and ease
of claims processing for customers receiving benefits outside of the Controlled
Affiliate's Service Area.

    Such programs are applicable to licensees, and include:

1.Transfer Program;

2.BlueCard Program;

18

--------------------------------------------------------------------------------

EXHIBIT A (continued)

3.Inter-Plan Teleprocessing System (ITS); and

4.Electronic Claims Routing Process.

    Standard 6(D): Financial Performance Requirements

    In addition to requirements under the national programs listed in

    Standard 6C: Participation in National Programs, a Controlled Affiliate
shall take such action as required to ensure its financial performance in
programs and contracts of an inter-licensee nature or where BCBSA is a party.

    Standard 6(E): Cooperation with Plan Performance Response Process

    A Controlled Affiliate shall cooperate with BCBSA's Board of Directors and
its Plan Performance and Financial Standards Committee in the administration of
the Plan Performance Response Process and in addressing Controlled Affiliate
performance problems identified thereunder.

    Standard 6(F): Independent Financial Rating

    A Controlled Affiliate shall obtain a rating of its financial strength from
an independent rating agency approved by BCBSA's Board of Directors for such
purpose.

    Standard 6(G): Best Efforts

    During each year, a Controlled Affiliate shall use its best efforts in the
designated Service Area to promote and build the value of the Blue Cross Mark.

    Standard 6(H): Financial Responsibility

    A Controlled Affiliate shall be operated in a manner that provides
reasonable financial assurance that it can fulfill all of its contractual
obligations to its customers.

Amended March 10, 2000

19

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EXHIBIT A (continued)

Standard 6(I): Reports and Records

A Controlled Affiliate shall furnish to BCBSA on a timely and accurate basis
reports and records relating to compliance with these Standards and the License
Agreements between BCBSA and Controlled Affiliate. Such reports and records are
the following:

A)BCBSA Controlled Affiliate Licensure Information Request; and

B)Biennial trade name and service mark usage material, including disclosure
material; and

C)Changes in the ownership and governance of the Controlled Affiliate, including
changes in its charter, articles of incorporation, or bylaws, changes in a
Controlled Affiliate's Board composition, or changes in the identity of the
Controlled Affiliate's Principal Officers, and changes in risk acceptance,
contract growth, or direct delivery of medical care; and

D)Quarterly Financial Report, Semi-annual "Managed Care Organizations Risk-Based
Capital (MCO-RBC) Report" as defined by the NAIC, Annual Certified Audit Report,
Insurance Department Examination Report, Annual Statement filed with State
Insurance Department (with all attachments); and

E)Quarterly Enrollment Report, Semi-Annual Benefit Cost Management Report.

Amended November 16, 2000

20

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EXHIBIT A (continued)

Standard 6(J): Control by Unlicensed Entities Prohibited

No Controlled Affiliate shall cause or permit an entity other than a Plan or a
Licensed Controlled Affiliate thereof to obtain control of the Controlled
Affiliate or to acquire a substantial portion of its assets related to
licensable services.

Standard 7—Other Standards for Risk-Assuming Workers' Compensation Controlled
Affiliates

Standards 7(A)—(E) that follow apply to Controlled Affiliates that underwrite
the indemnity portion of workers' compensation insurance.

Standard 7 (A): Financial Responsibility

A Controlled Affiliate shall be operated in a manner that provides reasonable
financial assurance that it can fulfill all of its contractual obligations to
its customers.

Standard 7(B): Reports and Records

A Controlled Affiliate shall furnish, on a timely and accurate basis, reports
and records relating to compliance with these Standards and the License
Agreements between BCBSA and the Controlled Affiliate. Such reports and records
are the following:

A.BCBSA Controlled Affiliate Licensure Information Request; and

B.Biennial trade name and service mark usage materials, including disclosure
materials; and

C.Annual Certified Audit Report, Annual Statement as filed with the State
Insurance Department (with all attachments), Annual NAIC's Risk-Based Capital
Worksheets for Property and Casualty Insurers; and

Amended June 16, 2000

21

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EXHIBIT A (continued)

Quarterly Financial Report, Quarterly Estimated Risk-Based Capital for Property
and Casualty Insurers, Insurance Department Examination Report; and

D.Notification of all changes and proposed changes to independent ratings within
30 days of receipt and submission of a copy of all rating reports; and

E.Changes in the ownership and governance of the Controlled Affiliate including
changes in its charter, articles of incorporation, or bylaws, changes in a
Controlled Affiliate's Board composition, Plan control, state license status,
operating area, the Controlled Affiliate's Principal Officers or direct delivery
of medical care.

Standard 7(C): Loss Prevention

A Controlled Affiliate shall apply loss prevention protocol to both new and
existing business.

Standard 7(D): Claims Administration

A Controlled Affiliate shall maintain an effective claims administration process
that includes all the necessary functions to assure prompt and proper resolution
of medical and indemnity claims.

Standard 7(E): Disability and Provider Management

A Controlled Affiliate shall arrange for the provision of appropriate and
necessary medical and rehabilitative services to facilitate early intervention
by medical professionals and timely and appropriate return to work.

Amended November 16, 2000

22

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EXHIBIT A (continued)

Standard 8—Cooperation with Controlled Affiliate License Performance Response
Process Protocol

A Controlled Affiliate and its Sponsoring Plan(s) shall cooperate with BCBSA's
Board of Directors and its Plan Performance and Financial Standards Committee in
the administration of the Controlled Affiliate License Performance Response
Process Protocol (ALPRPP) and in addressing Controlled Affiliate compliance
problems identified thereunder.

Standard 9—Participation in National Programs by Smaller Controlled Affiliates

A smaller Controlled Affiliate for which this standard applies pursuant to the
Preamble section of Exhibit A of the Controlled Affiliate License Agreement
shall effectively and efficiently participate in certain national programs from
time to time as may be adopted by Member Plans for the purposes of providing
ease of claims processing for customers receiving benefits outside of the
Controlled Affiliate's service area and be subject to certain relevant financial
and reporting requirements.

A.National program requirements include:

•BlueCard Program;

•Inter-Plan Teleprocessing System (ITS);

•Transfer Program; and

•Electronic Claims Routing Process.
B.Financial Requirements include:

•Standard 6(D): Financial Performance Requirements and Standard 6(H): Financial
Responsibility; or

•A financial guarantee covering the Controlled Affiliate's BlueCard Program
obligations in a form, and from a guarantor, acceptable to BCBSA.
C.Reporting requirements include:

•The Quarterly Capital Benchmark Worksheet.

Amended March 10, 2000

23

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Standard 10—Other Standards for Controlled Affiliates Whose Primary Business is
Government Non-Risk

Standards 10(A)—(C) that follow apply to Controlled Affiliates whose primary
business is government non-risk.

Standard 10(A)—Organization and Governance

A Controlled Affiliate shall be organized and operated in such a manner that it
is 1) wholly owned by a licensed Plan or Plans and 2) the sponsoring licensed
Plan or Plans have the legal ability to prevent any change in the articles of
incorporation, bylaws or other establishing or governing documents of the
Controlled Affiliate with which it does not concur.

24

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EXHIBIT A (continued)

Standard 10(B)—Financial Responsibility

A Controlled Affiliate shall be operated in a manner that provides reasonable
financial assurance that it can fulfill all of its contractual obligations to
its customers.

Standard 10(C):—Reports and Records

A Controlled Affiliate shall furnish, on a timely and accurate basis, reports
and records relating to compliance with these Standards and the License
Agreements between BCBSA and the Controlled Affiliate. Such reports and records
are the following:

A.BCBSA Affiliate Licensure Information Request; and

B.Biennial trade name and service mark usage materials, including disclosure
material; and

C.Annual Certified Audit Report, Annual Statement (if required) as filed with
the State Insurance Department (with all attachments), Annual NAIC Risk-Based
Capital Worksheets (if required) as filed with the State Insurance Department
(with all attachments), and Insurance Department Examination Report (if
applicable)*; and

D.Changes in the ownership and governance of the Controlled Affiliate, including
changes in its charter, articles of incorporation, or bylaws, changes in the
Controlled Affiliate's Board composition, Plan control, state license status,
operating area, the Controlled Affiliate's Principal Officers or direct delivery
of medical care.

25

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EXHIBIT B
ROYALTY FORMULA FOR SECTION 9 OF THE
CONTROLLED AFFILIATE LICENSE AGREEMENT

Controlled Affiliate will pay BCBSA a fee for this license in accordance with
the following formula:

FOR RISK AND GOVERNMENT NON-RISK PRODUCTS:

For Controlled Affiliates not underwriting the indemnity portion of workers'
compensation insurance:

An amount equal to its pro rata share of each sponsoring Plan's dues payable to
BCBSA computed with the addition of the Controlled Affiliate's subscription
revenue and contracts arising from products using the marks. The payment by each
sponsoring Plan of its dues to BCBSA, including that portion described in this
paragraph, will satisfy the requirement of this paragraph, and no separate
payment will be necessary.

For Controlled Affiliates underwriting the indemnity portion of workers'
compensation insurance:

An amount equal to 0.35 percent of the gross revenue per annum of Controlled
Affiliate arising from products using the marks; plus, an annual fee of $5,000
per license for a Controlled Affiliate subject to Standard 7.

For Controlled Affiliates whose primary business is government non-risk:

An amount equal to its pro-rata share of each sponsoring Plan's dues payable to
BCBSA computed with the addition of the Controlled Affiliate's government
non-risk beneficiaries.

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EXHIBIT B (continued)

FOR NONRISK PRODUCTS:

An amount equal to 0.24 percent of the gross revenue per annum of Controlled
Affiliate arising from products using the marks; plus:

1)An annual fee of $5,000 per license for a Controlled Affiliate subject to
Standard 6 D.

2)An annual fee of $2,000 per license for all other Controlled Affiliates.

The foregoing shall be reduced by one-half where both a BLUE CROSS® and BLUE
SHIELD® License are issued to the same Controlled Affiliate. In the event that
any license period is greater or less than one (1) year, any amounts due shall
be prorated. Royalties under this formula will be calculated, billed and paid in
arrears.

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QuickLinks

EXHIBIT 10.04
BLUE SHIELD CONTROLLED AFFILIATE LICENSE AGREEMENT (Includes revisions adopted
by Member Plans through their November 16, 2000, meeting)
THIS PAGE IS INTENTIONALLY BLANK.
STANDARDS FOR LICENSED CONTROLLED AFFILIATES