Document 232 : Docket No. 99-14 : Hearing Decision : Bureau of Insurance

STATE OF MAINE

DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION

BUREAU OF INSURANCE

IN RE: APPLICATION OF ASSOCIATED HOSPITAL SERVICE OF MAINE, d/b/a BLUE CROSS AND BLUE SHIELD OF MAINE, TO CONVERT TO A STOCK INSURER AND VOLUNTARILY LIQUIDATE AND DISSOLVE

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IN RE: APPLICATION OF ANTHEM HEALTH PLAN OF MAINE, INC., TO ACQUIRE THE ASSETS OF ASSOCIATED HOSPITAL SERVICE OF MAINE, d/b/a BLUE CROSS AND BLUE SHIELD OF MAINE, AND RELATED TRANSACTIONS

Docket NO. INS 99-14 (CONSOLIDATED)

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ANTHEM INSURANCE COMPANIES, INC.’S FOURTH SUPPLEMENT TO RESPONSE TO SECOND DISCOVERY REQUEST OF THE SUPERINTENDENT

January 27, 2000

NON-CONFIDENTIAL VERSION

Applicants, Anthem Insurance Companies, Inc., on behalf of its subsidiary to be formed, Anthem Health Plans of Maine, Inc., d/b/a Anthem Blue Cross and Blue Shield (collectively "Anthem"), hereby submits its Fourth Supplement to the Second Discovery Request of the Superintendent of Insurance, dated December 3, 1999, as follows:

The following responses by Anthem are subject to the objections and clarifications previously filed by Anthem on December 10 & 17, 1999. To the extent that any additional responsive documents are located in the future, Anthem reserves its rights to object to producing such documents to the extent covered by the attorney-client and or work product privileges.

Please provide a description of Anthem’s dividend policy as regards the Blue Cross subsidiaries, both past and prospective.

Response:

Anthem initially responded to the Superintendent’s question as follows:

"Anthem has no formal capitalization policy. Anthem often reviews the statutory capitalization of its subsidiaries on an annual basis. This review compares the current statutory surplus of each subsidiary to internal, NAIC, state, and Blue Cross Blue Shield Association capitalization requirements. Included in the review are current capital needs as well as known or anticipated changes. It also considers statutes and regulations in the subsidiary state of domicile relative to dividend payments. Should actual surplus exceed the needed capital, and such excess is within the state’s "ordinary" dividend provision, a dividend will be considered and Anthem would then provide appropriate notification to the state insurance regulator. If such a dividend is to be made and the amount exceeds the "ordinary" limit, a formal request would be made to the regulator, or a smaller dividend might be paid."

After a request from the Superintendent’s staff consultant to expand on this response, Anthem hereby submits its 1999 year end dividend analysis (AN-03158 to AN-03160) and documents reflecting the December 1999 dividend paid from Anthem Blue Cross and Blue Shield of Connecticut to its parent Anthem East, Inc. and the supporting work papers for the dividend calculation (AN-03161 to AN-03171). Anthem’s 1999 year end dividend analysis (AN-03158 to AN-03160) is confidential and will be removed from Anthem’s non-confidential version of this filing.

DATED: January 27, 2000

_____________________________

James B. Zimpritch, Esq.

Jeffrey M. White, Esq.

Catherine R. Connors, Esq.

PIERCE ATWOOD

One Monument Square

Portland, Maine 04101

(207) 791-1100

Attorneys for Anthem Insurance Companies, Inc

CERTIFICATE OF SERVICE

The undersigned hereby certifies that on January 27, 2000 a copy of the Non-Confidential Version of Anthem Insurance Companies, Inc.’s Fourth Supplement to Response to the Second Discovery Request of the Superintendent was served by United States mail, first class postage prepaid, or, where indicated, by hand delivery, on each of the persons listed below.

Robert S. Frank, Esq.

Harvey & Frank

Two City Center

P.O. Box 126

Portland, Maine 04112

e-mail: frank@harveyfrank.com

(Blue Cross/Blue Shield of Maine)

Judith Chamberlain, Esq.

State of Maine

Department of the Attorney General

6 State House Station

Augusta, Maine 04333-0006

e-mail: judy.chamberlain@state.me.us

(Bureau of Insurance)

William H. Laubenstein, Esq.

State of Maine

Department of the Attorney General

6 State House Station

Augusta, Maine 04333-0006

e-mail: bill.laubenstein@state.me.us

(Office of the Attorney General)

Gregory A. Brodek, Esq.

Duane, Morris & Heckscher, LLP

15 Columbia Street, 4^th Floor

Bangor, Maine 04401-6355

e-mail: gabrodek@duanemorris.com

(Maine Health Alliance)

Joseph P. Ditre, Esq.

Consumer Health Law Program

One Weston Court, Level One

P.O. Box 2490

Augusta, Maine 04338-2490

e-mail: jditre@mainecahc.org

(Consumers for Affordable Health Care Foundation/Coalition)

Michele M. Garvin, Esq.

Ropes & Gray

One International Place

Boston, Massachusetts 02110-2624

e-mail: Mgarvin@Ropesgray.com

(Central Maine Healthcare Corporation; Central Maine Partners Health Plan)

Robert I. Goldman

Maine Council of Senior Citizens

27 Bowery Beach Road

Cape Elizabeth, Maine 04107

e-mail: Rgoldma1@maine.rr.com

(Maine Council of Senior Citizens)

Bonnie Post

Executive Director of the Maine Ambulatory Care Coalition

P.O. Box 390

Manchester, Maine 04351

e-mail: bdpmacc@mint.net

(Sacopee Valley Health Center, Regional Medical Center at Lubec, Eastport Health Care, Inc., and the Maine Ambulatory Care Coalition)

John Dieffenbacher-Krall

Executive Director

Maine People’s Alliance

192 State Street

Portland, Maine 04101

e-mail: MPA@gwi.net

(Maine People’s Alliance)

Gordon H. Smith, Esq.

Maine Medical Association

30 Association Drive

P.O. Box 190

Manchester, Maine 04351

e-mail: gsmith@ctel.net

(Thomas D. Hayward, M.D.,

Maroulla S. Gleaton, M.D.,

And the Maine Medical Association)

Donald E. Quigley, Esq.

General Counsel

465 Congress Street, Suite 600

Portland, Maine 04101-3537

e-mail: quigld@mail.mmc.org

(Maine Medical Center)

Sandra L. Parker, Esq.

Attorney for MHA, Inc.

150 Capitol Street

Augusta, Maine 04330

e-mail: sparker@themha.org

(MHA, Inc.)

Kellie P. Miller, M.S.

Executive Director

Maine Osteopathic Association

693 Western Avenue

Manchester, Maine 04351

e-mail: meosteo@mint.net

(Maine Osteopathic Association)

Edward Miller

Executive Director

American Lung Association of Maine

122 State Street

Augusta, Maine 04330

e-mail: emiller@mainelung.org

(American Lung Association of Maine)

DATED: January 27, 2000

_____________________________

James B. Zimpritch, Esq.

Jeffrey M. White, Esq.

Catherine R. Connors, Esq.

PIERCE ATWOOD

One Monument Square

Portland, Maine 04101

(207) 791-1100

Attorneys for Anthem Insurance Companies, Inc.