§ 27-66-8 Review process and reviewcriteria by department of business regulation for conversions. – (a) The department shall review all proposed conversions involving a healthinsurance corporation, health maintenance organization, non-profit hospitalservice corporation or a non-profit medical service corporation.
(b) In reviewing proposed conversions in accordance withsubsection (a) of this section the department shall adhere to the followingprocess:
(1) Within ten (10) working days after receipt of two (2)copies of an initial application pursuant to § 27-66-6, the departmentshall publish notice of the application in a newspaper of general circulationin the state and shall notify by United States mail any person who hasrequested notice of the filing of the application. The notice shall state: (i)that an initial application has been received, (ii) the names of thetransacting parties, (iii) the date by which a person may submit writtencomments to the department, and (iv) shall provide notice of the date, time andplace of a public hearing;
(2) Within thirty (30) days after receipt of an initialapplication, the department shall advise the applicant in writing whether theapplication is complete, and, if not, shall specify what additional informationis required;
(3) The department shall, upon receipt of informationrequested in subdivision (2) of this subsection, notify the applicant inwriting of the date of completion of the application;
(4) The department shall approve, approve with conditionsdirectly related to the proposed conversion, or disapprove the applicationwithin ninety (90) days of the date of completion of the application;
(c) In reviewing an application for a conversion involvinghealth insurance corporations, health maintenance organizations, non-profithospital service corporations, or non-profit medical service corporations thedepartment shall consider the following criteria:
(1) Whether the proposed conversion provides reasonableassurance that the entity surviving after the conversion will be financiallyviable and competently managed;
(2) Whether the character, commitment, competence, andstanding in the community, or any other communities served by the proposedtransacting parties, are satisfactory;
(3) Whether the transacting parties have made a commitment toassure the continuation of collective bargaining rights, if applicable, andretention of the workforce;
(4) Whether the transacting parties have appropriatelyaccounted for employment needs at the facility and addressed workforceretraining needed as a consequence of any proposed restructuring;
(5) Whether the acquiror has demonstrated that it hassatisfactorily met the terms and conditions of approval for any previousconversion pursuant to an application submitted under § 27-66-5.
(6) Whether the acquiree established appropriate criteria indeciding to pursue a conversion in relation to carrying out its mission andpurposes;
(7) Whether the acquiree formulated and issued appropriaterequests for proposals in pursuing a conversion;
(8) Whether the acquiree considered the proposed conversionas the only alternative or as the best alternative in carrying out its missionand purposes;
(9) Whether the acquiree exercised due care in engagingconsultants with the appropriate level of independence, education, andexperience in similar conversions;
(10) Whether the acquiree exercised due care in acceptingassumptions and conclusions provided by consultants engaged to assist in theproposed conversion;
(11) Whether the acquiree accepted fair consideration andvalue for any management contracts made part of the proposed conversion;
(12) Whether the proposed conversion contemplates theappropriate and reasonable fair market value;
(13) Whether the proposed conversion was based uponappropriate valuation methods including, but not limited to, market approach,third party report or fairness opinion;
(14) Whether officers, directors, or senior managementdeliberately acted or failed to act in a manner that impacted negatively on thevalue or purchase price;
(15) Whether the board exposed an inappropriate amount ofassets by accepting in exchange for the proposed conversion future orcontingent value based upon success of the new health insurance corporations,health maintenance organizations, nonprofit hospital service corporations, andnonprofit medical service corporations;
(16) Whether the formula used in determining the value of theacquiree was appropriate and reasonable which may include, but not be limitedto, factors such as: the multiple factor applied to the "EBITDA": earningsbefore interest, taxes, depreciation, and amortization; the time period of theevaluation; price/earnings multiples; the projected efficiency differencesbetween the acquiree and the new entity and the historic value of any taxexemptions granted to the acquiree;
(17) Whether the transacting parties have made a commitment:(i) to honor existing contracts with subscribers, businesses and providers, and(ii) to satisfy outstanding liabilities to providers through a formal accountreconciliation process;
(18) Whether a right of first refusal to repurchase theassets has been retained;
(19) Whether a control premium is an appropriate component ofthe proposed conversion;
(20) Whether the value of assets factored in the conversionis based on past performance or future potential performance;
(21) Whether the board exercised due care in assigning avalue to the acquiree and its charitable assets in proceeding to negotiate theproposed conversion;
(22) Any criteria delineated in § 27-35-2(d)(1) whichthe department deems applicable and appropriate.
(23) The detailed report submitted to the department ofbusiness regulation, by the department of the attorney general; and
(24) Any other criteria the department deems relevant to itsinvestigation;
(25) Whether the transacting parties have made a commitmentto assure access to care for insured, underinsured and uninsured members of thecommunity;
(26) Whether the proposed conversion negatively impacts onthe quality and reliability of health services.
(d) In considering the criteria in subsection (c), thedepartment shall assign any weight and importance that it deems necessary andappropriate under the circumstances to carry out the purposes of this chapter.
§ 27-66-8 Review process and reviewcriteria by department of business regulation for conversions. – (a) The department shall review all proposed conversions involving a healthinsurance corporation, health maintenance organization, non-profit hospitalservice corporation or a non-profit medical service corporation.
(b) In reviewing proposed conversions in accordance withsubsection (a) of this section the department shall adhere to the followingprocess:
(1) Within ten (10) working days after receipt of two (2)copies of an initial application pursuant to § 27-66-6, the departmentshall publish notice of the application in a newspaper of general circulationin the state and shall notify by United States mail any person who hasrequested notice of the filing of the application. The notice shall state: (i)that an initial application has been received, (ii) the names of thetransacting parties, (iii) the date by which a person may submit writtencomments to the department, and (iv) shall provide notice of the date, time andplace of a public hearing;
(2) Within thirty (30) days after receipt of an initialapplication, the department shall advise the applicant in writing whether theapplication is complete, and, if not, shall specify what additional informationis required;
(3) The department shall, upon receipt of informationrequested in subdivision (2) of this subsection, notify the applicant inwriting of the date of completion of the application;
(4) The department shall approve, approve with conditionsdirectly related to the proposed conversion, or disapprove the applicationwithin ninety (90) days of the date of completion of the application;
(c) In reviewing an application for a conversion involvinghealth insurance corporations, health maintenance organizations, non-profithospital service corporations, or non-profit medical service corporations thedepartment shall consider the following criteria:
(1) Whether the proposed conversion provides reasonableassurance that the entity surviving after the conversion will be financiallyviable and competently managed;
(2) Whether the character, commitment, competence, andstanding in the community, or any other communities served by the proposedtransacting parties, are satisfactory;
(3) Whether the transacting parties have made a commitment toassure the continuation of collective bargaining rights, if applicable, andretention of the workforce;
(4) Whether the transacting parties have appropriatelyaccounted for employment needs at the facility and addressed workforceretraining needed as a consequence of any proposed restructuring;
(5) Whether the acquiror has demonstrated that it hassatisfactorily met the terms and conditions of approval for any previousconversion pursuant to an application submitted under § 27-66-5.
(6) Whether the acquiree established appropriate criteria indeciding to pursue a conversion in relation to carrying out its mission andpurposes;
(7) Whether the acquiree formulated and issued appropriaterequests for proposals in pursuing a conversion;
(8) Whether the acquiree considered the proposed conversionas the only alternative or as the best alternative in carrying out its missionand purposes;
(9) Whether the acquiree exercised due care in engagingconsultants with the appropriate level of independence, education, andexperience in similar conversions;
(10) Whether the acquiree exercised due care in acceptingassumptions and conclusions provided by consultants engaged to assist in theproposed conversion;
(11) Whether the acquiree accepted fair consideration andvalue for any management contracts made part of the proposed conversion;
(12) Whether the proposed conversion contemplates theappropriate and reasonable fair market value;
(13) Whether the proposed conversion was based uponappropriate valuation methods including, but not limited to, market approach,third party report or fairness opinion;
(14) Whether officers, directors, or senior managementdeliberately acted or failed to act in a manner that impacted negatively on thevalue or purchase price;
(15) Whether the board exposed an inappropriate amount ofassets by accepting in exchange for the proposed conversion future orcontingent value based upon success of the new health insurance corporations,health maintenance organizations, nonprofit hospital service corporations, andnonprofit medical service corporations;
(16) Whether the formula used in determining the value of theacquiree was appropriate and reasonable which may include, but not be limitedto, factors such as: the multiple factor applied to the "EBITDA": earningsbefore interest, taxes, depreciation, and amortization; the time period of theevaluation; price/earnings multiples; the projected efficiency differencesbetween the acquiree and the new entity and the historic value of any taxexemptions granted to the acquiree;
(17) Whether the transacting parties have made a commitment:(i) to honor existing contracts with subscribers, businesses and providers, and(ii) to satisfy outstanding liabilities to providers through a formal accountreconciliation process;
(18) Whether a right of first refusal to repurchase theassets has been retained;
(19) Whether a control premium is an appropriate component ofthe proposed conversion;
(20) Whether the value of assets factored in the conversionis based on past performance or future potential performance;
(21) Whether the board exercised due care in assigning avalue to the acquiree and its charitable assets in proceeding to negotiate theproposed conversion;
(22) Any criteria delineated in § 27-35-2(d)(1) whichthe department deems applicable and appropriate.
(23) The detailed report submitted to the department ofbusiness regulation, by the department of the attorney general; and
(24) Any other criteria the department deems relevant to itsinvestigation;
(25) Whether the transacting parties have made a commitmentto assure access to care for insured, underinsured and uninsured members of thecommunity;
(26) Whether the proposed conversion negatively impacts onthe quality and reliability of health services.
(d) In considering the criteria in subsection (c), thedepartment shall assign any weight and importance that it deems necessary andappropriate under the circumstances to carry out the purposes of this chapter.
§ 27-66-8 Review process and reviewcriteria by department of business regulation for conversions. – (a) The department shall review all proposed conversions involving a healthinsurance corporation, health maintenance organization, non-profit hospitalservice corporation or a non-profit medical service corporation.
(b) In reviewing proposed conversions in accordance withsubsection (a) of this section the department shall adhere to the followingprocess:
(1) Within ten (10) working days after receipt of two (2)copies of an initial application pursuant to § 27-66-6, the departmentshall publish notice of the application in a newspaper of general circulationin the state and shall notify by United States mail any person who hasrequested notice of the filing of the application. The notice shall state: (i)that an initial application has been received, (ii) the names of thetransacting parties, (iii) the date by which a person may submit writtencomments to the department, and (iv) shall provide notice of the date, time andplace of a public hearing;
(2) Within thirty (30) days after receipt of an initialapplication, the department shall advise the applicant in writing whether theapplication is complete, and, if not, shall specify what additional informationis required;
(3) The department shall, upon receipt of informationrequested in subdivision (2) of this subsection, notify the applicant inwriting of the date of completion of the application;
(4) The department shall approve, approve with conditionsdirectly related to the proposed conversion, or disapprove the applicationwithin ninety (90) days of the date of completion of the application;
(c) In reviewing an application for a conversion involvinghealth insurance corporations, health maintenance organizations, non-profithospital service corporations, or non-profit medical service corporations thedepartment shall consider the following criteria:
(1) Whether the proposed conversion provides reasonableassurance that the entity surviving after the conversion will be financiallyviable and competently managed;
(2) Whether the character, commitment, competence, andstanding in the community, or any other communities served by the proposedtransacting parties, are satisfactory;
(3) Whether the transacting parties have made a commitment toassure the continuation of collective bargaining rights, if applicable, andretention of the workforce;
(4) Whether the transacting parties have appropriatelyaccounted for employment needs at the facility and addressed workforceretraining needed as a consequence of any proposed restructuring;
(5) Whether the acquiror has demonstrated that it hassatisfactorily met the terms and conditions of approval for any previousconversion pursuant to an application submitted under § 27-66-5.
(6) Whether the acquiree established appropriate criteria indeciding to pursue a conversion in relation to carrying out its mission andpurposes;
(7) Whether the acquiree formulated and issued appropriaterequests for proposals in pursuing a conversion;
(8) Whether the acquiree considered the proposed conversionas the only alternative or as the best alternative in carrying out its missionand purposes;
(9) Whether the acquiree exercised due care in engagingconsultants with the appropriate level of independence, education, andexperience in similar conversions;
(10) Whether the acquiree exercised due care in acceptingassumptions and conclusions provided by consultants engaged to assist in theproposed conversion;
(11) Whether the acquiree accepted fair consideration andvalue for any management contracts made part of the proposed conversion;
(12) Whether the proposed conversion contemplates theappropriate and reasonable fair market value;
(13) Whether the proposed conversion was based uponappropriate valuation methods including, but not limited to, market approach,third party report or fairness opinion;
(14) Whether officers, directors, or senior managementdeliberately acted or failed to act in a manner that impacted negatively on thevalue or purchase price;
(15) Whether the board exposed an inappropriate amount ofassets by accepting in exchange for the proposed conversion future orcontingent value based upon success of the new health insurance corporations,health maintenance organizations, nonprofit hospital service corporations, andnonprofit medical service corporations;
(16) Whether the formula used in determining the value of theacquiree was appropriate and reasonable which may include, but not be limitedto, factors such as: the multiple factor applied to the "EBITDA": earningsbefore interest, taxes, depreciation, and amortization; the time period of theevaluation; price/earnings multiples; the projected efficiency differencesbetween the acquiree and the new entity and the historic value of any taxexemptions granted to the acquiree;
(17) Whether the transacting parties have made a commitment:(i) to honor existing contracts with subscribers, businesses and providers, and(ii) to satisfy outstanding liabilities to providers through a formal accountreconciliation process;
(18) Whether a right of first refusal to repurchase theassets has been retained;
(19) Whether a control premium is an appropriate component ofthe proposed conversion;
(20) Whether the value of assets factored in the conversionis based on past performance or future potential performance;
(21) Whether the board exercised due care in assigning avalue to the acquiree and its charitable assets in proceeding to negotiate theproposed conversion;
(22) Any criteria delineated in § 27-35-2(d)(1) whichthe department deems applicable and appropriate.
(23) The detailed report submitted to the department ofbusiness regulation, by the department of the attorney general; and
(24) Any other criteria the department deems relevant to itsinvestigation;
(25) Whether the transacting parties have made a commitmentto assure access to care for insured, underinsured and uninsured members of thecommunity;
(26) Whether the proposed conversion negatively impacts onthe quality and reliability of health services.
(d) In considering the criteria in subsection (c), thedepartment shall assign any weight and importance that it deems necessary andappropriate under the circumstances to carry out the purposes of this chapter.
