2023 Rhode Island General Laws › Title 27 - Insurance › Chapter 27-66 - The Health Insurance Conversions Act › Section 27-66-6. - Initial application — Conversions.

§ 27-66-6. Initial application — Conversions.
(a)
No person shall engage in a conversion involving the establishment, maintenance, or operation of a health insurance corporation, health maintenance organization, nonprofit hospital service corporation, or nonprofit medical service corporation, without prior approval of the department of business regulation. The transacting parties shall file an initial application in accordance with subsection (b) of this section which shall, at a minimum, include the following information with respect to each transacting party and to the proposed new health insurance corporation, health maintenance organization, nonprofit hospital service corporation, or nonprofit medical service corporation:
(1)
A detailed summary of the proposed conversion;
(2)
Names, addresses, and phone numbers of the transacting parties;
(3)
Name, address, phone number, and occupation of all officers, members of the board of directors, trustees, executive and senior level management including for each position, current persons and persons holding the position during the past three (3) years;
(4)
Articles of incorporation and certificate of incorporation;
(5)
Bylaws and organizational charts;
(6)
Organizational structure for existing transacting parties and each partner, affiliate, parent, subsidiary, or related corporate entity in which the acquiror has a twenty percent (20%) or greater ownership interest;
(7)
Conflict of interest statements, policies, and procedures;
(8)
Names, addresses, and phone numbers of professional consultants engaged in connection with the proposed conversion;
(9)
Copies of audited income statements, balance sheets, and other financial statements for the past three (3) years and to the extent they have been made public, audited interim financial statements and income statements together with a detailed description of the financing structure of the proposed conversion including equity contribution, debt restructuring, stock issuance, partnership interests, stock offerings, and the like;
(10)
A detailed description as each relates to the proposed transaction for equipment leases, insurance, regulatory compliance, tax status, pending litigation or pending regulatory citations, pension plan descriptions and employee benefits, assessments and organizational goals;
(11)
Copies of reports analyzing the proposed conversion during the past three (3) years including, but not limited to, reports by appraisers, accountants, investment bankers, actuaries, and other experts;
(12)
A description of the manner in which the price was determined including which methods of valuation and what data were used, and the names and addresses of persons preparing these documents, and this information is deemed to be proprietary;
(13)
The name and mailing address of all facilities in which the acquiror maintains an ownership interest or controlling interest or operating authority;
(14)
A list of pending or adjudicated citations, violations, or charges against the facilities listed in subsection (a)(13) of this section brought by any governmental agency within the past three (3) years and the status or disposition of each matter with regard to its operation;
(15)
The names of persons currently holding a position as an officer, director, or senior level management who will or will not maintain any position with the new health insurance corporation, health maintenance organization, nonprofit hospital service corporation, or nonprofit medical service corporation and whether this person will receive any salary, severance stock offering, or any financial gain, current or deferred, as a result of or in relation to the proposed conversion;
(16)
Current, signed original conflict of interest forms from all officers, directors, trustees, senior management, chairpersons, or department chairpersons on a form acceptable to the attorney general;
(17)
Any other material that the department of business regulation deems relevant to its investigation;
(18)
A detailed description of real estate owned or leased including title reports for land owned and lease agreements concerning the proposed conversion;
(19)
Copies of all documents related to: (i) Identification of all charitable assets; (ii) Accounting of all charitable assets for the past three (3) years; and (iii) Distribution of the charitable assets including, but not limited to, endowments, restricted, unrestricted and specific purpose funds as each relates to the proposed transaction;
(20)
A description of the plan as to how the new health insurance corporation, health maintenance organization, nonprofit hospital service corporation, or nonprofit medical service corporation will provide community benefits and continued access to health insurance during the first three (3) years of operation;
(21)
Copies of documents or description of any proposed plan for any entity to be created for charitable assets, including but not limited to, endowments, restricted, unrestricted and specific purpose funds, the proposed articles of incorporation, bylaws, mission statement, program agenda, method of appointment of board members, qualifications of board members, duties of board members, and conflict of interest policies;
(22)
The application shall also include a complete statement of performance during the preceding one year with regard to the terms and conditions of approval of conversion and each projection, plan, or description submitted as part of the application for any conversion completed under any application;
(23)
Copies of all NCQA (National Council on Quality Assurance) reports and profiles and all NAIC (National Association of Insurance Commissioners) reports issued during the past five (5) years.
(b)
Two (2) copies of the initial application shall be provided to the department of business regulation and the department of attorney general simultaneously by United States mail, certified, return receipt requested.
(c)
Except for information determined by the department of business regulation in accordance with § 27-66-23 to be confidential and/or proprietary, the initial application, supporting documentation, and the attorney general’s report shall be considered public records and shall be available for inspection upon request.
History of Section.
P.L. 1999, ch. 215, § 1; P.L. 1999, ch. 376, § 1.