NJ Rev Stat § 17:48E-67 (2021)
2021 New Jersey Revised Statutes|Title 17 - Corporations and Institutions for Finance and Insurance|Section 17:48E-67 - Petition for review of foundation plan.

17:48E-67 Petition for review of foundation plan.  19. a. (1) A health service corporation shall submit to the Attorney General a petition for review of a foundation plan at the same time that it submits a plan of conversion to the commissioner. The petition shall include the foundation plan and any other information that the Attorney General requests. (2) Within 60 days of the health service corporation's submission of the petition to the Attorney General, the Attorney General shall advise the health service corporation in writing whether the petition is complete, and, if not, shall specify what additional information is required. (3) The Attorney General shall, upon receipt of the information requested, notify the health service corporation in writing of the date of completion of the petition. b. The Attorney General shall review the petition and may either support the proposed foundation plan, with or without any specific modifications, or, if he finds that it is not in the public interest, oppose the foundation plan in the Superior Court proceeding commenced pursuant to subsection f. of this section. c. When reviewing the petition, in addition to considering whether the foundation plan meets the requirements of subsection d. of this section, the Attorney General shall consider whether: (1) the health service corporation exercised due diligence in deciding to effectuate the conversion, selecting any other party to the conversion or related transactions, and negotiating the terms and conditions of the conversion; (2) the procedures used by the health service corporation in approving the conversion, including whether expert assistance was used, were appropriate; (3) a conflict of interest was disclosed, including, but not limited to, conflicts of interest related to board members of, employees of, and experts retained by, the health service corporation or any other parties to the conversion; (4) any management contract under the conversion or any related transaction is for reasonable fair value; (5) any proceeds of the conversion will be used solely for purposes of expanding access to affordable, quality health care for underserved individuals and promoting fundamental improvements in the health status of New Jerseyans; (6) the health service corporation established appropriate criteria in deciding to pursue a conversion and considered the proposed conversion as the only alternative or as the best alternative in relation to carrying out its mission and purposes; and (7) officers, directors, board members or senior management of the health service corporation will receive contracts in any existing, new or affiliated health service corporation, foundation, the converted insurer, any parent corporation or any affiliate of any of the foregoing. d. The foundation plan shall meet the following requirements: (1) The foundation plan shall provide for the establishment of one or more foundations that will receive the fair market value of the health service corporation following its conversion to a domestic stock insurer and that meets the following requirements: (a) The foundation shall be a trust or nonprofit corporation formed under the laws of this State, but shall not include the health service corporation or any person controlled by the health service corporation. (b) The foundation shall be a charitable entity that qualifies for federal income tax exemption under paragraph (3) of subsection (c) of section 501 of the federal Internal Revenue Code of 1986, 26 U.S.C. s. 501. (c) The foundation shall have the sole purposes of expanding access to affordable, quality health care for underserved individuals and promoting fundamental improvements in the health status of all New Jerseyans. (d) The foundation, its directors, officers and trustees and the assets of the foundation, including any stock of the converted insurer or a parent corporation, shall be independent of any influence or control by the converted insurer, its parent corporation, any of their subsidiaries or affiliates, any of their respective directors, officers, trustees or employees, except with the prior approval of the Attorney General and the commissioner. (e) The foundation shall not have more than one of its directors serve as a director of the converted insurer or its parent corporation. (f) The foundation shall not have as a director, officer or senior management any person who has been a director, officer, agent, trustee or employee of the health service corporation, the converted insurer, its parent corporation or any affiliate of any of them during the three-year period preceding the date of appointment as a director, officer or senior manager of the foundation. (g) The foundation shall have a board of directors that when appointed will comply with section 20 of this act. (2) The foundation shall provide the Attorney General with an annual report which shall include an audited financial statement and a detailed description of its grant-making and other charitable activities related to its use of the charitable assets received pursuant to the conversion. The annual report shall be made available to the public at both the Attorney General's office and the office of the foundation. Nothing contained in this act shall affect the obligations of an entity possessing endowment funds under the "Uniform Management of Institutional Funds Act," P.L.1975, c.26 (C.15:18-15 et seq.). (3) The governing body of the foundation shall establish or demonstrate that it has in place, as the case may be, a mechanism to avoid conflicts of interest, including those associated with grant-making activities that may benefit the converted insurer, its affiliates, any person who owns or controls any ownership interest in either the converted insurer or any of its affiliates, and any director or officer of the converted insurer or its affiliates. e. The Attorney General shall, during the course of the review of the foundation plan pursuant to this section, hold at least one public hearing in which any person may file written comments and exhibits or appear and make a statement. The public hearing may, if the Attorney General and the commissioner so agree, be conducted jointly as part of the public hearing on the conversion required pursuant to subsection e. of section 3 of this act. The Attorney General may subpoena additional information or witnesses, including, but not limited to, information about any transaction that is collateral to the proposed conversion and any related documents, require and administer oaths, require sworn statements, take depositions and use related discovery procedures for purposes of the hearing and at any time prior to completing the review of the proposed conversion. The hearing shall be in the nature of a legislative hearing and shall not constitute or be considered a contested case under the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.). The public hearing shall be held no later than 90 days after the date that the petition is declared complete by the Attorney General. Public notice of the hearing shall be provided by the health service corporation not more than 45 days and not less than 15 days prior to the public hearing in at least two newspapers of general circulation in New Jersey. f. Upon completion by the Attorney General of the review of the petition, the health service corporation shall apply to the Superior Court for approval of the establishment of the foundation. In that action, which shall proceed in a summary manner, the Attorney General shall advise the court as to whether he supports or opposes the foundation plan, with or without any specific modifications, and the basis for that position. In considering whether the foundation plan is in the public interest, the court shall consider whether the requirements of paragraph (1) of subsection d. of this section have been satisfied and may consider the criteria established in subsection c. of this section, as applicable. If the health service corporation fails to comply with this subsection, the Attorney General may seek appropriate relief in Superior Court. L.2001,c.131,s.19.