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Maine.gov > PFR Home > Insurance Regulation> Administrative & Enforcement Actions > Document 32 : INS 99-14 : Hearing Decision
STATE OF MAINE
A prehearing conference in the captioned proceeding was held on Friday, October 29, 1999 in South Portland, Maine. Participating in the conference were: James Zimpritch, Esq. on behalf of Anthem Insurance Companies, Inc. and Anthem Health Plan of Maine; Robert Frank, Esq. on behalf of Associated Hospital Service of Maine; Linda Pistner, Chief Deputy Attorney General and William Laubenstein, Assistant Attorney General on behalf of the State of Maine Attorney General. Superintendent of Insurance Alessandro A. Iuppa presided over the conference.
The Applicants filed a Motion for Procedural Order with the Superintendent on October 27, 1999. Elements of the proposed order filed were discussed at the prehearing conference and written comments were received from the Attorney General. The Superintendent agrees that a procedural order is warranted but does not adopt the order proposed by the Applicants. Rather, this proceeding will be conducted in accordance with the following procedures.
Maine Insurance Rule Chapter 350, (3)(A), provides that the Superintendent may, where good cause appears, deviate from the provisions of Rule 350 insofar as he finds compliance therewith to be impracticable, inexpedient or unnecessary. The Superintendent anticipates this proceeding will involve unique issues, will involve multiple parties, and will require extraordinary efforts to inform the public. Thus, the Superintendent considers it prudent to set out in detail the procedures to be applied in this proceeding.
In addition to the procedures set forth in this Order, this proceeding will also be conducted pursuant to the Maine Administrative Procedure Act, 5 M.R.S.A. Chapter 375, subchapter IV and pursuant to 24-A M.R.S.A. §§ 229 to 236. Maine Insurance Rule Chapter 350 shall also apply to the extent not inconsistent with this Order.
Parties and Intervention
At this time, the parties to the proceeding have been identified as Associate Hospital Service of Maine (d/b/a Blue Cross and Blue Shield of Maine) and Anthem Health Plan of Maine. Persons wishing to intervene as parties in this proceeding shall file their application in writing with the Superintendent of Insurance, Maine Bureau of Insurance, 34 State House Station, Augusta, Maine 04333-0034. Applications for intervention as of right pursuant to 5 M.R.S.A. §9054(1) shall contain a statement explaining how the applicant is or may be a member of a class which is or may be substantially and directly affected by the proceeding or identifying the applicants status as an agency of federal, state or local government. Applications for permissive intervention pursuant to 5 M.R.S.A. §9054(2) shall contain a statement explaining and substantiating the applicants interest in the proceeding.
A person does not need to intervene in order to testify at the hearing in this proceeding as ample opportunity for public comment and testimony will be provided at the hearing. Intervenor status should be sought only by those willing and prepared to undertake the responsibilities placed upon parties as set forth in Maine law and this Prehearing Order.
The Superintendent may require parties with similar interests to coordinate the drafting and service of discovery requests as well as the presentation of evidence and witnesses in order to reduce possible duplication of efforts and ensure an efficient and effective process. In particular, parties with similar interests are encouraged to, among other things, coordinate the use of experts, review draft discovery requests to eliminate duplication, and coordinate the testimony of witnesses and issues to be addressed at the hearing.
Service of Documents
All filings and other correspondence relating to this proceeding must be
Alessandro A. Iuppa, Superintendent of Insurance
C/o Lyndy Morgan
Maine Bureau of Insurance
34 State House Station
Augusta, ME 04333-0034
Filings may be made by mail or by hand-delivery to the Superintendent. The Maine Bureau of Insurance is located at 124 Northern Avenue, Gardiner, Maine. No document is considered filed until it is received by the Superintendent.
Method of Filing
All documents filed by Parties in this proceeding must meet the following criteria:
The Superintendent will not accept official documents filed by electronic mail or by facsimile transmission.
Unless otherwise ordered by the Superintendent, all documents due to be filed by a date certain must be filed no later than 3:00 p.m. of the due date. Filings made after that time will be considered filed late and will be datestamped as having been received the next business day.
Service on other Parties
A Service List will be established by the Superintendent and provided to all parties.
Each party is to provide the Superintendent with the name, address, telephone number, FAX number and e-mail address of one person upon whom service for that party is to be made. If service is made on a party both electronically and by hard copy, the time to respond shall be calculated using the date the document is first received.
Each party must include a certification of service on other parties as part of any filing or submission made to the Superintendent. Service on other parties shall be simultaneous with filing with the Superintendent. Neither the Superintendent, the Bureau of Insurance, will be responsible for providing copies of filings or other documents to the service list. If a party fails to serve all other parties on the designated service list, the filing will not be accepted by the Superintendent until proof of service on all parties is provided.
Format of Filing
All documents filed by parties to the proceeding shall be appropriately captioned following the format attached as Exhibit A and contain the Docket Number assigned by the Superintendent to the proceeding, INS 99-14.
All filings made by the parties in this proceeding must include a Table of Contents only if more than one document is contained within the filing, or if one document contains multiple sections . In addition, all documents filed by parties must include a separate cover sheet that includes all of the information set forth below:
A sample cover sheet is attached to this Order as Exhibit B
All documents filed with the Superintendent of Insurance by parties to the proceeding must be paginated. References by parties to particular pages in a document may consist of the document number that will be assigned by the Bureau to each document, followed by the page number.
Filing of Confidential Material
Every motion or request for an order or ruling of any kind by the Superintendent shall be in writing, unless made on the record during a hearing to which the request or motion is related. Every request or motion should include or be accompanied by a clear statement of the support for the order or other action sought. The statement supporting the request or motion should also include any arguments with respect to policy or law that have a bearing the request.
Requests or motions and their supporting papers should be clearly labeled on the first page and in the caption with a title that includes "motion" or "request," a short description of the action or order requested, and language in the caption sufficient to identify the matter to which the request or motion relates. If legal arguments are advanced, the supporting statement accompanying the motion shall include citations to all supporting authorities relied upon by the moving party.
Any party opposing a motion shall file a statement in opposition to the motion or request within seven (7) days after receipt of the motion, unless the Superintendent establishes some other period. If service is by mail, the motion shall be presumed received two (2) days following the date of mailing.
Motions for rehearing or reopening to change, modify, rescind or vacate a decision or order of the Superintendent must be filed with the Superintendent within twenty (20) days after service of the determination or order to which the request relates, unless an earlier date is specified in the decision or order. Unless otherwise specified by the Superintendent, a decision to grant a motion to rehear or reopen a case does not act to stay the effect of the Superintendents order to which the rehearing or reopening applies. Any motion for rehearing or reopening that is not granted within twenty (20) days from the date of filing shall be deemed to be denied. The Superintendent, may, on his own motion, and after notice to all parties, rehear or reopen any matter at any time, to the extent permitted by law.
Communications with the Bureau
Except as otherwise noted in this paragraph, parties shall not communicate with respect to this proceeding with the Superintendent, the Staff of the Maine Bureau of Insurance or consultants retained by the Bureau without notice and opportunity for all parties to be present. Parties may direct questions of a strictly ministerial nature to Norman Stevens, Esq. Document Team Manager or to Lyndy Morgan, Legal Secretary. Procedural queries should be directed only to Judith Shaw Chamberlain, Assistant Attorney General and Counsel to the Superintendent in this proceeding
Recognizing that parties may require input from Bureau staff during this proceeding, certain staff members and legal counsel will be available to meet with the parties Friday mornings from 9:00 12:00. No later than 3:00 p.m. on the Tuesday before a Friday meeting, any party wishing to place issues on the agenda must notify Judith Shaw Chamberlain, Assistant Attorney General, in writing with copies to all parties and Lyndy Morgan, Legal Secretary for the Bureau. While all parties may attend the meeting, only the party who placed the item on the agenda and staff will be permitted to address the issue raised. If no requests for agenda items are received by the deadline for submissions, the Friday meeting will be cancelled. The first meeting with Bureau staff is scheduled for Friday, November 12, 1999, at the Bureaus offices in Gardiner.
At his discretion, the Superintendent may direct a member of his staff to provide independent analysis of all or part of the filings in this proceeding. That analysis shall be made part of the record in this case and the staff member shall be subject to cross-examination at the hearing.
Nothing in this Order shall permit the Superintendent, when rendering a decision, to rely upon any evidence or other factual information outside of that made part of the record.
The Superintendent has hired the following consultants to assist him in this proceeding: Arthur Andersen LLP (actuarial, financial and valuation consultant) and Drinker Biddle & Reath (legal consultant). Arthur Andersen LLP shall be deemed agents of the Bureau of Insurance and the rules applicable to staff members set forth herein regarding communications and cross-examination shall apply equally to them. The rules set forth herein regarding communications shall apply equally to Drinker Biddle & Reath. Nothing in this Order is intended to limit the ability of Drinker Biddle & Reath to have open communications with parties to any legal proceedings involving the creation of a charitable foundation and Drinker Biddles representation of the Superintendent therein.
Interested Persons List
The Bureau of Insurance is maintaining an interested persons list with respect to this proceeding. Persons on the interested persons list will receive copies of Notices of any Prehearing Conferences and Hearings with respect to this proceeding, but will not receive other pleadings and correspondence except as the Superintendent, in his discretion, may direct. Persons may direct requests to be placed on the interested persons list to Lyndy Morgan, Legal Secretary, Maine Bureau of Insurance, 34 State House Station, Augusta, ME 04333-0034. E-mail requests to be place on the interested persons list should be addressed to Lyndy.P.Morgan@state.me.us.
Communications from the Public
Communications from the general public for the Superintendents consideration will not be subject to formal filing requirements.
In the interest of maintaining a complete record, communications from the general public in connection with this proceeding and any responses from the Superintendent or his Staff will be maintained as part of the Record of Proceeding. As provided by 5 M.R.S.A. §9057, such communications will not constitute evidence unless sworn to by the author and the author is available for cross-examination or subject to subpoena, except for good cause shown. Communications from the general public and responses thereto will not be copied to the Parties. Any such documents will be available for review by the Parties during the regular business hours of the Bureau. Representative communications between the general public and the Superintendent and/or his staff may be made available on the Bureaus home page.
Pursuant to Bureau of Insurance Rule ch. 350(9)(B), members of the general public who are not intervenors will be provided with opportunity to comment at the hearing in this proceeding. Persons speaking during the public comment portion of the hearing may either make an unsworn statement or testify under oath. Persons who present testimony under oath are subject to cross-examination by the parties. Only those comments presented as sworn testimony may be relied upon as evidence by the Superintendent.
Subject to the Superintendents discretion, many documents relating to this proceeding will be made available to the public via the Internet.
Copies of all discovery requests and responses to discovery requests must be served on all parties and filed with the Superintendent according to the same standards and procedures applicable to any other filing in this proceeding. All parties are prohibited from making requests for information that is duplicative of prior requests made by any party. To the extent that documents have been provided previously in this proceeding in response to a discovery request, those documents may be referenced in subsequent responses and need not be produced again.
Should any party oppose any part of an information request served, that party and the requesting party shall confer in good faith to attempt to resolve the dispute, before filing an objection with the Superintendent. The Superintendent shall rule promptly on any objection filed with him, with or without a hearing, within the discretion of the Superintendent.
To the extent practical, all parties are asked to group discovery requests under one of the headings set forth in Exhibit C. The purpose of this request is to facilitate the management and indexing of discovery documents filed with the Superintendent. Precise categorization is not required.
Discovery requests and responses do not become part of the record of the proceeding unless admitted as exhibits during the hearing or as a late-filed exhibit.
On the deadline established for pre-filed testimony, any party wishing to submit evidence shall pre-file with the Superintendent written testimony and exhibits of each witness whom they propose to present in support of their direct cases. A copy of all testimony and exhibits must be served on all other parties to the proceeding in accordance with the requirements set forth above. Such testimony can be admitted as an exhibit at the hearing only if the witness, under oath, affirms the pre-filed testimony and is subject to cross-examination. The pre-filed testimony shall be in question and answer format; summary or other non-testimonial material shall not be accepted.
Such pre-filed testimony and exhibits are subject to objection when offered at the hearing, but in no event may be admitted unless the witness submitting the testimony is available at the hearing for cross-examination.
The scope of said pre-filed testimony and exhibits should be limited to the issues and subject matters outlined in the applicable statutes, and by such further order of the Superintendent.
On the date established for the filing of statements of facts, any party may submit a statement of facts that, in the partys view, are subject to official notice by the Superintendent, as set forth in 5 M.R.S.A. § 9058.
Schedule of Proceeding
The Schedule of Proceeding set forth below is hereby established by the Superintendent. Specific dates, times and locations of the public comment and evidentiary portions of the hearing are to be announced. All persons are advised that this Schedule may be subject to change based upon developments in the proceeding and prospectively should verify the current schedule as necessary.
December 10, 1999 Deadline for Intervention Requests
January 24, 2000 Public Comment Portion of Hearing commences
February 4, 2000 Deadline for Serving Discovery Requests
February 18, 2000 Deadline for Serving Responses to Discovery Requests
March 2, 2000 Deadline for submission of Reports of Experts
March 24, 2000 Deadline for Filing Requests for the Taking of Official Notice
March 28, 2000 Deadline for Filing of Prefiled Testimony and Exhibits
April 3, 2000 Continuation of Hearing, Gardiner
Failure to Comply with Rules and Orders
Should any participant violate or disregard any Bureau Rule or Order of the Superintendent, the Superintendent shall, without any further notice, have the option and may exercise the option, to impose an appropriate sanction, including, without limitation, denial of any relevant participant request; striking material from the record; or consideration, and/or reduction or elimination of that participants participation in the proceedings.
The Applicants shall be required to publish Notice of the Hearing in these proceedings in The Portland Press Herald and Maine Sunday Telegram, the Lewiston Sun-Journal including the weekend edition, the Kennebec Journal/Waterville Sentinel including the weekend edition, and the Bangor Daily News including the weekend edition. The Notice shall appear as a ¼ page display advertisement and shall run once in a weekday edition and once in a weekend edition of each paper.
In addition, in accordance with 5 M.R.S.A. § 2301(9-D)(C), Applicant Associated Hospital Service (d/b/a Blue Cross and Blue Shield of Maine) shall provide individual copies of the Notice of Hearing to each of its directors, officers, employees, members and subscribers all of whom have the right to appear and be heard at the hearing.
The Department of Professional and Financial Regulation does not discriminate on the basis of disability in admission to, access to or operation of its programs, services or activities. Individuals in need of auxiliary aid or with other special needs for effective communication with respect to any aspect of this proceeding are invited to make their needs and preference known to the Superintendent sufficiently in advance of the need so that appropriate arrangements can be made.
Alessandro A. Iuppa
Superintendent of Insurance
Anthem / Blue Cross Blue Shield of Maine
Required Indexing Information
All documents filed by parties must include a separate cover sheet, which includes all of the following information:
Two hard copies and two electronic copies of the document must be submitted with confidential information removed and submitted under a separate red cover.
One hard copy must also be submitted to Judith Shaw Chamberlain, Assistant Attorney General, 6 State House Station, Augusta, ME 04333.
Electronic documents are to be submitted on a Compact Disk or 3 ½" Floppy Disk in Microsoft Word Format (Word 97 or earlier) or RICH Text formats (RTF).
All confidential information must be submitted on a separate 3 ½" Floppy Disk or Compact Disk clearly marked in red "confidential." Please indicate whether confidential information is part of an otherwise non-confidential document.
Name of Submitting Party:
Title of the Document:
(Pleading; Discovery Request, Discovery Response; Letter; Proposed Order; Motion)
Number of hard copies submitted:
Number of 3 ½" Floppy or Compact Disk copies submitted:
Is confidential information submitted with the document? (Circle one) Yes No
All confidential information must be submitted separately and clearly marked in red along with on a separate 3 ½" Floppy Disk or Compact Disk also marked in red.
All documents must be submitted with page numbers.
INDEXING SHEET FOR Docket NUMBER 99-14
Parties are requested to assist the Bureaus document management team by marking or highlighting as many conceptual topic/issues as are discussed or significantly impacted by documents filed with the Bureau in connection with the above referenced proceeding, 99-14. Please just use your best judgment and mark all categories that directly apply. Your choices will be used only as a starting point for internal indexing and document management purposes. Notations referencing page numbers or discovery question numbers would be helpful but are not required.
Conversion to Domestic Stock Insurer
Section 222, Form-A, Rule 180
Certificate of Authority
Investments of Life and Health Insurers
Incorporation of Domestic Stock, Mutual Insurers
Acquisition of Controlling Stock
Boards of Directors
Comparative Premium Rate Analysis
Competence/Experience/Integrity of Anthem
Financial Condition of Applicants
Applicants Future Plans
Impact on Contractual Obligations/Policyholders/Public
Applicants Character/Experience/Financial Responsibility
Fair Market Value Issues
HMO and Managed Care Compliance Issues
Effect on Existing Policy Holders
Affect on Future Policy Holders
Last Updated: January 21, 2014
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