2023 Vermont Statutes › Title 8 - Banking and Insurance › Chapter 125 - Nonprofit Medical Service Corporations › § 4595. Change in control; material transactions; redomestication; establishment or acquisition of control of insurance company subsidiary

§ 4595. Change in control; material transactions; redomestication; establishment or acquisition of control of insurance company subsidiary
(a)(1) No corporation permitted to engage in business under this chapter shall merge or consolidate with, sell, transfer, or exchange more than a 10-percent interest in the corporation or its assets to, or sell, transfer, or exchange more than 10 percent of its subscribers to, or otherwise transfer or commit more than a 10-percent interest in itself to, any other person, whether accomplished through one transaction or a series of transactions, without the Commissioner’s prior written approval.
(2) No corporation permitted to engage in business under this chapter shall transfer its domicile to any other state or jurisdiction without the prior written approval of the Commissioner.
(3) A corporation permitted to engage in business under this chapter shall obtain the Commissioner’s written approval prior to establishing or acquiring control of a for-profit or not-for-profit entity that is authorized to engage in the business of insurance under chapter 101 or chapter 139 of this title or the insurance law of any other U.S. jurisdiction. For purposes of this subdivision, “control” shall have the same meaning as in subdivision 3681(3) of this title. In addition to any other investment limitations established pursuant to this title, investments in entities authorized to engage in the business of insurance under chapter 101 or 139 of this title or the insurance law of any other U.S. jurisdiction shall be limited to 25 percent of total assets of the nonprofit medical services corporation in the aggregate; provided, however, that this limitation shall exclude investments in existence on May 1, 2004.
(b) A corporation shall make application to the Commissioner for approval of any transaction set forth in subsection (a) of this section describing in detail the proposed transaction and identifying the parties involved. The Commissioner may require the filing of additional information as the Commissioner finds necessary or appropriate for the full consideration of the application. The applicant shall establish to the Commissioner’s satisfaction that the transaction meets the general good of the State. To the extent applicable in the circumstances, the Commissioner shall consider, but is not limited to, the following factors in the general good determination:
(1) whether, after the transaction, the corporation continues to satisfy the requirements for a permit to do business under this chapter;
(2) whether the effect of the transaction would be to substantially lessen competition in health insurance in this State or tend to create a monopoly in health insurance in this State;
(3) whether the financial condition of any acquiring or acquired party is such as might jeopardize the financial stability of the corporation or prejudice the interest of its subscribers;
(4) whether the transaction contemplates the liquidation of the corporation or any other material change in its business or corporate structure or management, that would be unfair or unreasonable to its subscribers or not in the public interest;
(5) whether the competence, experience, and integrity of those persons who would control the operation of the new entity, or the acquiring or acquired party are such that it would not be in the interest of the public to permit the transaction;
(6) whether the transaction will promote cost-effective, high-quality health care in the State; and
(7) such other factors as the Commissioner deems relevant to the transaction.
(c) The Commissioner shall investigate and hold at least one public hearing on the application. The public hearing shall be held within 30 days of the filing of a complete application with the Commissioner, and at least 20 days’ notice thereof shall be given by the Commissioner to the person filing the application and the office of the Attorney General. The applicant shall give seven days’ notice to any person as ordered by the Commissioner. The Commissioner may order such public notice as may be deemed necessary for full consideration of the transaction. The Commissioner shall make a determination within 30 days after the conclusion of such hearing. If a determination of general good is made, the Commissioner shall give the corporation a certificate to that effect. In the event of conflict between the provisions of section 3305 or 3683 of this title and the provisions of this section, the provisions of this section shall control.
(d) The Commissioner may consider the review or portion of a review of the transaction by the insurance department of another state, district, or territory of the United States if the Commissioner finds that the review or portion of review conducted by the other jurisdiction is substantially similar in nature and scope as a review or portion of review under this section.
(e) Any corporation permitted to engage in business under this chapter may, upon the approval of the Commissioner under subsections (a) and (b) of this section, and in compliance with such conditions as may be imposed by the Commissioner, transfer its domicile, in accordance with the laws thereof, to any other state or jurisdiction, and upon such a transfer, it shall cease to be a domestic corporation and its corporate or other legal existence in this State shall cease upon the filing of proof of such redomestication with the Secretary of State and upon payment to the Secretary of State of a filing fee in the amount of $100.00. Such corporation shall be permitted to do business in this State under this chapter as a foreign corporation, upon compliance with the qualification requirements for foreign corporations under section 4593 of this title. The Commissioner may require any corporation redomesticating under this section to form an adequately capitalized affiliate or subsidiary corporation under this chapter, whenever the Commissioner determines that such a requirement is in the best interests of members or subscribers and will promote the general good of the State.
(f) A for profit or not for profit entity established or acquired with the Commissioner’s approval granted under this section shall be governed by the provisions of chapter 101 or 139 of this title, as applicable, and not the provisions of this chapter, other than this section.
(g) Nothing in this section shall be construed to limit any common law authority of the Attorney General with respect to a nonprofit health care conversion, nor shall this section be construed to limit the application of Title 11B to any transaction reviewable under this section.
(h) Any application filed with the Commissioner under this section shall be accompanied by a fee of $10.00. (Added 1997, No. 54, § 9, eff. June 26, 1997; amended 2003, No. 163 (Adj. Sess.), § 42, eff. June 10, 2004; 2021, No. 105 (Adj. Sess.), § 218, eff. July 1, 2022.)