§ 27-66-6 - Initial application – Conversions. - Rhode Island Statutes

SECTION 27-66-6

   § 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 maintenanceorganization, non-profit hospital service corporation or non-profit medicalservice corporation, without prior approval of the department of businessregulation. The transacting parties shall file an initial application inaccordance with subsection (b) of this section which shall, at a minimum,include the following information with respect to each transacting party and tothe proposed new health insurance corporation, health maintenance organization,non-profit hospital service corporation or non-profit medical servicecorporation:

   (1) A detailed summary of the proposed conversion;

   (2) Names, addresses and phone numbers of the transactingparties;

   (3) Name, address, phone number and occupation of allofficers, members of the board of directors, trustees, executive and seniorlevel management including for each position, current persons and personsholding position during the past three (3) years;

   (4) Articles of incorporation and certificate ofincorporation;

   (5) Bylaws and organizational charts;

   (6) Organizational structure for existing transacting partiesand each partner, affiliate, parent, subsidiary or related corporate entity inwhich 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 professionalconsultants engaged in connection with the proposed conversion;

   (9) Copies of audited income statements, balance sheets, andother financial statements for the past three (3) years and to the extent theyhave been made public, audited interim financial statements and incomestatements together with detailed description of the financing structure of theproposed conversion including equity contribution, debt restructuring, stockissuance, partnership interests, stock offerings and the like;

   (10) A detailed description as each relates to the proposedtransaction for equipment leases, insurance, regulatory compliance, tax status,pending litigation or pending regulatory citations, pension plan descriptionsand employee benefits, assessments and organizational goals;

   (11) Copies of reports analyzing the proposed conversionduring the past three (3) years including, but not limited to, reports byappraisers, accountants, investment bankers, actuaries and other experts;

   (12) A description of the manner in which the price wasdetermined including which methods of valuation and what data were used, andthe names and addresses of persons preparing these documents, and thisinformation is deemed to be proprietary;

   (13) The name and mailing address of all facilities in whichthe acquiror maintains an ownership interest or controlling interest oroperating authority;

   (14) A list of pending or adjudicated citations, violationsor charges against the facilities listed in subsection (13) brought by anygovernmental agency within the past three (3) years and the status ordisposition of each matter with regard to its operation;

   (15) The names of persons currently holding a position as anofficer, director, or senior level management who will or will not maintain anyposition with the new health insurance corporation, health maintenanceorganization, non-profit hospital service corporation or non-profit medicalservice corporation and whether this person will receive any salary, severancestock offering or any financial gain, current or deferred, as a result of or inrelation to the proposed conversion;

   (16) Current, signed original conflict of interest forms fromall officers, directors, trustees, senior management, chairpersons ordepartment chairpersons on a form acceptable to the attorney general;

   (17) Any other material that the department of businessregulation deems relevant to its investigation;

   (18) A detailed description of real estate owned or leasedincluding title reports for land owned and lease agreements concerning theproposed conversion;

   (19) Copies of all documents related to: (i) identificationof all charitable assets; (ii) accounting of all charitable assets for the pastthree (3) years; and (iii) distribution of the charitable assets including, butnot limited to, endowments, restricted, unrestricted and specific purpose fundsas each relates to the proposed transaction;

   (20) A description of the plan as to how the new healthinsurance corporation, health maintenance organization, nonprofit hospitalservice corporation or nonprofit medical service corporation will providecommunity benefits and continued access to health insurance during the firstthree (3) years of operation;

   (21) Copies of documents or description of any proposed planfor any entity to be created for charitable assets, including but not limitedto, endowments, restricted, unrestricted and specific purpose funds, theproposed articles of incorporation, bylaws, mission statement, program agenda,method of appointment of board members, qualifications of board members, dutiesof board members, and conflict of interest policies;

   (22) The application shall also include a complete statementof performance during the preceding one year with regard to the terms andconditions of approval of conversion and each projection, plan, or descriptionsubmitted as part of the application for any conversion completed under anyapplication.

   (23) Copies of all NCQA (National Council on QualityAssurance) reports and profiles and all NAIC (National Association of InsuranceCommissioners) reports issued during the past five (5) years;

   (b) Two (2) copies of the initial application shall beprovided to the department of business regulation and the department ofattorney general simultaneously by United States mail, certified, returnreceipt requested.

   (c) Except for information determined by the department ofbusiness regulation in accordance with § 27-66-23 to be confidentialand/or proprietary, the initial application, supporting documentation, and theattorney general's report shall be considered public records and shall beavailable for inspection upon request.