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Maine.gov > PFR Home > Insurance Regulation > Hearing Decision Index > Document 102 : INS 99-14 : Hearing Decision
STATE OF MAINE
DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION
BUREAU OF INSURANCE
The Superintendent of Insurance ("Superintendent") has requested that the Attorney General respond to Applicants Response to Intervenors Positions on HMO Certificate of Authority ("Response"). It is the Applicants position that Anthem BCBSME, a Maine domestic health insurer to be formed by Anthem Insurance Companies, Inc. ("Anthem"), is not required to apply for a certificate of authority to operate a health maintenance organization ("HMO") as a line of business pursuant to 24-A M.R.S.A. §§ 4203-4204. The Attorney General does not find the arguments presented by Applicants persuasive and believes that the plain language of Section 4203(1) requires Anthem BCBSME to apply for a certificate of authority to operate an HMO as a line of business.
Applicants argue that there is no "logical, practical or rational basis" for making an application for an HMO certificate under 24-A M.R.S.A.§§ 4203-4204. The issue, however, is not what Applicants view as an unnecessary distraction from their Application to convert and voluntarily liquidate and dissolve. The issue is what the statute requires.
The Attorney General agrees with Applicants that Anthem BCBSME is not required to apply for a certificate of authority for the continued operation of the Maine Partners Health Plan, Inc. or Central Maine Partners Health Plan, Inc. Anthem BCBSME is required by Section 4203, however, to apply for a certificate of authority to operate BCBSMEs HMO line of business. The language of Section 4203 is clear and unambiguous:
24-A M.R.S.A.§ 4203. When the meaning of a statute is clear on its face, there is no need to go beyond the words themselves. See Cook v. Lisbon School Committee, 682 A.2d 672, 676 (Me. 1996) (if text of statute given its plain meaning answers the question raised, the language must prevail and no further inquiry is required); Leach Memorial Home v. City of Brewer, 1998 ME 118, ¶ 5 711 A.2d 151 (court looks first to plain meaning of statutory language to give effect to legislative intent).
Applicants appear to acknowledge that Section 4203 is clear on its face when they state on page 8 of their Response that if "Title 24-A were ambiguous on whether a duplicative HMO filing were required, the statutory language would be construed not to require such a filing." Nevertheless, they then proceed to argue from a detailed examination of other statutory definitions and provisions that Section 4203 is not clear on its face. These arguments are not persuasive. Since Section 4203 is not ambiguous, there is no reason to go beyond the words of the statute. State v. Fournier, 617 A.2d 998, 999-100 (Me. 1992) (only if statutory language is ambiguous will court go beyond words of the statute).
Applicants argue that an insurer licensed pursuant to 24-A M.R.S.A. §§ 413-414 may operate an HMO without complying with the requirements of Sections 4203-4204. They base this argument on the language in Section 4214 of Title 24-A which permits a licensed insurer to operate an HMO as a line of business and on 24-A M.R.S.A.§ 11 which states that provisions of Title 24-A relating to a particular kind of insurance prevail over provisions relating to insurance in general. These arguments do not withstand scrutiny.
Sections 413-414 are the general statutory provisions relating to the application for, and issuance of, an original certificate of authority to transact insurance business in Maine. The applicant must identify the kinds of insurance to be transacted. In this regard a health insurer is only authorized under the general provisions of Title 24-A "to transact life insurance, life and annuity insurance or health insurance as defined in Sections 702-704." 24-A M.R.S.A.§ 409(3). A health insurer is not authorized to transact business as a health maintenance organization.
Section 4214, rather than relieving Anthem BCBSME from the application requirements of 4203, permits it to seek an HMO certificate notwithstanding the limitations on the insurance it could transact under a certificate issued under Sections 413-414. Section 4214(1-A), regarding investment of funds does not require a different result. This provision only makes clear that a licensed insurer may not rely on its general insurance certificate to meet HMO requirements for investment of funds allocated to that line of business. While this provision may appear to overlap the provisions of Sections 4203-4204, it does not negate the legislative intent expressed in Section 4203 that all persons wishing to operate an HMO must apply for a certificate of authority; or defeat the statutory scheme that includes specific provisions for the establishment, maintenance, ownership, organization or operation of an HMO. Cf. State v. Spaulding, 1998 ME 29, ¶ 21 707 A.2d 378 (overlapping of two criminal statutes does not reflect lack of harmony on legislative schemes) (footnote 5) (Lipez, dissenting).
Applicants argue that the power of the Superintendent to review applications for a certificate of authority under Section 413, to issue a certificate of authority under Sections 4203-4204 and approve acquisitions and mergers under Section 222 should be interpreted to encompass the authority to approve the operation by Anthem BCBSME of an HMO line of business without satisfying the requirements of Sections 4203-4204. Applicants present no statutory or case authority for this proposition.
Administrative agencies are creatures of statute and "are limited in their operations within the framework established for them by the Legislature . . .." Clark v. State Employees Appeals Board, 363 A.2d 735, 736 (Me. 1976). They " can have only such powers as those expressly conferred upon them by the Legislature, or such as arise therefrom by necessary implication to allow carrying out the powers accorded to them." Valente v. Board of Environmental Protection, 461 A.2d 716, 719. The Maine Insurance Code does not grant to the Superintendent the power to relieve the Applicants of the obligation to satisfy the requirements of Sections 4203-4204. Nor can it be said that such power is necessary for the Superintendent to carry out his power to approve or disapprove the conversion, dissolution and liquidation of BCBSME and the purchase and sale of assets which are the purposes of the current proceeding. An examination of the certificate of approval processes shows that no person may transact business as a health insurer unless "authorized by a certificate of authority issued by the Superintendent," 24-A M.R.S.A.§ 404; or establish, own, organize or operate an HMO line of business without obtaining a certificate of authority. 24-A M.R.S.A.§ 4203. The Legislature has not provided any exceptions to these statutory requirements.
The conclusion that the Superintendent may not relieve Applicants of the obligation of satisfying the requirements of Sections 4203-4204 does not preclude the Superintendent, in his discretion, from employing procedures as the exigencies of a particular case may require. In the present case, there appear to be good and sufficient reasons for the Superintendent to employ procedures that would minimize any delay in the consideration of the application of BCBSME to convert to a stock insurer and voluntarily liquidate and dissolve. These reasons include the current financial condition of BCBSME, the need to preserve assets for the benefit of the Maine Health Access Foundation and the need to ensure the continuous provision of quality health care services to the BCBSMEs subscribers. Any procedures that may be employed by the Superintendent, however, should ensure that any certificate of authority to operate an HMO is conditioned upon full satisfaction of the requirements of Sections 4203 and 4204.
While it is clear that the Maine Insurance Code requires Anthem BCBSME to have a certificate of authority to operate an HMO line of business, the Attorney General agrees with other intervenors that the focus of the proceedings should be on the substantive requirements of 24-A M. R. S. A.§§ 4203-4204 and that whatever procedures the Superintendent may employ in considering Anthem BCBSMEs application must involve a showing that it will satisfy the requirements of Sections 4203-4204.
Dated: __________________ __________________________________
Last Updated: August 22, 2012
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