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> Document 662 : INS 99-14 : Hearing Decision
March 30, 2000
VIA HAND DELIVERY
Alessandro A. Iuppa Superintendent of Insurance c/o Lyndy Morgan Docket No. INS-99-14 Maine Department of Professional & Financial Regulation Bureau of Insurance 124 Northern Avenue Gardiner, Maine 04345 Re: Anthem / Blue Cross Blue Shield of Maine: Amendment No. 2 to Form A
Dear Superintendent Iuppa: I enclose for filing Amendment No. 2 ("Amendment No. 2") to the Form A Statement Regarding the Acquisition of Control of Domestic Insurers, which was originally filed at Tab 6 of the Initial Consolidated Filing dated September 15, 1999, and amended on March 10, 2000 ("Form A"). Amendment No. 2 reflects the addition as "acquired insurers" of Patriot Mutual Insurance Company, d/b/a Blue Alliance Insurance Company of Maine ("Blue Alliance"), and its subsidiary Patriot Life Insurance Company ("Patriot Life"). As set forth more fully in Amendment No. 2, the application for acquisition of control of Blue Alliance and Patriot Life is made because Anthem Health Plans of Maine, Inc. proposes to assume "control" of those entities within the meaning and for purposes of 24-A M.R.S.A. § 222(2)(B) and (4-A). However, that control will be limited in time and scope as set forth in Amendment No. 2. In addition, Amendment No. 2 contains changes to Form A (1) necessitated by recent amendments to the Asset Purchase Agreement by and between Associated Hospital Service of Maine and Anthem Insurance Companies, Inc. dated as of July 13, 1999, and (2) reflective of the Modified Charitable Trust Plan approved by the Superior Court on December 27, 1999. Please let me know if I can be of further assistance in this matter. Very truly yours,
James B. Zimpritch Enclosures
AMENDMENT NO. 2 TO FORM A (d/b/a/ Blue Cross and Blue Shield of Maine), Maine Partners Health Plan, Inc., Central Maine Partners Health Plan, Inc., Patriot Mutual Insurance Company (d/b/a Blue Alliance Insurance Company of Maine), and Patriot Life Insurance Company (Name of Domestic Insurers) (the "Acquired Insurers") by Anthem Insurance Companies, Inc., through its subsidiary Anthem Health Plans of Maine, Inc. (d/b/a Anthem Blue Cross and Blue Shield) (Name of Acquiring Person) (the "Applicant")
Filed with the Maine Bureau of Insurance
Dated: March 30, 2000
Names, Titles, and Addresses of Individuals to Whom Notices and Correspondence Concerning this Statement Should be Addressed: For the Applicant For the Acquired Insurers David R. Frick, Esq. Edward J. Kane, Esq. Anthem Insurance Companies, Inc. Blue Cross and Blue Shield of Maine 120 Monument Circle 2 Gannett Drive Indianapolis, Indiana 46204-4903 South Portland, Maine 04106-6911 With a copy to: With a copy to: James B. Zimpritch, Esq. Robert S. Frank, Esq. Pierce Atwood Harvey & Frank One Monument Square Two City center, Fourth Floor Portland, Maine 04101 Portland, Maine 04101 This Amendment No. 2 amends the Statement Regarding the Acquisition of Control of Domestic Insurers dated September 15, 1999, as amended on March 10, 2000 (the "Form A") that seeks the Superintendent’s prior approval of the acquisition of the assets of Associated Hospital Service of Maine, d/b/a Blue Cross and Blue Shield of Maine, a Maine nonprofit corporation and nonprofit hospital and medical service organization ("BCBSME") by Anthem Health Plans of Maine, Inc., a Maine domestic health insurer ("AHPM"). AHPM is a wholly owned subsidiary of Anthem East, Inc., a Delaware stock corporation, which, in turn, is a wholly owned stock subsidiary of Anthem Insurance Companies, Inc., an Indiana mutual insurance company ("Anthem"). The assets to be acquired include the stock of, or ownership interests in, BCBSME’s subsidiaries and affiliates, including the stock that BCBSME owns in the Maine Partners Health Plan, Inc., a Maine health maintenance organization, and Central Maine Partners Health Plan, Inc., a Maine health maintenance organization. This Amendment No. 2 amends the Form A to reflect, among other things, the acquisition of control, within the meaning of and for purposes of 24-A M.R.S.A. Section 222 and Rule Chapter 180, of Patriot Mutual Insurance Company, d/b/a Blue Alliance Insurance Company of Maine, a Maine domestic insurer ("Blue Alliance"), and Patriot Life Insurance Company, a Maine domestic insurer and wholly owned subsidiary of Blue Alliance ("Patriot Life"). In accordance with that proposed acquisition of control, the term "Acquired Insurers" in the Form A includes Blue Alliance and Patriot Life, unless the context requires otherwise. All capitalized terms herein have the meanings set forth herein or in the Form A. The Form A is hereby amended as follows: 1. Item 1(a) of Form A is hereby amended to include the following. The Form A relates to the acquisition of control of Blue Alliance and Patriot Life, as well as the acquisition of control of Maine Partners and Central Maine Partners, and the purchase of substantially all of the assets and assumption of substantially all of the liabilities of BCBSME as set forth in the Asset Purchase Agreement as amended. Blue Alliance is a Maine domestic insurer presently controlled, as control is defined in Maine law and understood in practice, by BCBSME. That control is effected by means of: (1) Bylaw requirements for common directorships; (2) common directors; (3) common officers; and (4) Service Agreements (the "Service Agreements") identified in the Memorandum of Understanding between and among Anthem Insurance Companies, Inc., Blue Alliance, and Patriot Life (the "MOU"), which was filed with the Bureau of Insurance on March 23, 2000. Patriot Life is a Maine domestic insurer presently controlled, as control is defined in Maine law and understood in practice, by BCBSME. That control is effected by means of: (1) BCBSME’s control of Blue Alliance, which in turn owns 100% of the issued and outstanding shares of Patriot Life; (2) Blue Alliance Bylaws requiring common directorships with BCBSME; (3) common directors, i.e., all directors of Patriot Life are identical with all directors of Blue Alliance and all Blue Alliance directors are BCBSME directors or senior management employees of BCBSME; (4) common officers; and (5) a Management Services Agreement dated October 1, 1995 as amended between Patriot Life and Machigonne (one of the "Service Agreements"). The address of the principal offices of Blue Alliance and Patriot Life is currently the same as the address for BCBSME. As described below in Item 1(b)(i), AHPM’s assumption of certain obligations at the Closing will constitute the acquisition of "control" of Blue Alliance and Patriot Life within the meaning of 24-A M.R.S.A. § 222(2)(B) & (4-A). However, it is anticipated that within at most two years after the Closing, AHPM will cease to exercise such control as set forth in Item 1(b)(i). It is only to the extent under the terms and conditions stated in Item 1(b)(i) that AHPM will acquire control of Blue Alliance and Patriot Mutual, and the application to acquire control of those entities is made only under the terms and conditions expressly set forth herein. 2. Item 1(b)(i) of Form A is hereby amended as follows: A. The last sentence of the first paragraph of Item 1(b)(i) is hereby amended to read as follows: "AHPM will assume substantially all obligations and liabilities of BCBSME, excluding BCBSME taxes and certain other exclusions as set forth in the Asset Purchase Agreement as amended." B. The last paragraph of Item 1(b)(i) is hereby deleted and replaced in its entirety with the following paragraphs. "Pursuant to the MOU, as of the Closing and for a period of up to two years thereafter, Anthem will cause AHPM to assume the Service Agreements and will, as of the Closing, amend the Service Agreements to enable Blue Alliance and/or Patriot Life, as the case may be, to terminate any or all of the Service Agreements on thirty days notice. Immediately following the Closing, Anthem will cause AHPM, Machigonne and/or Northern General Services, as the case may be, to utilize the personnel who are currently performing services under the Service Agreements to which those entities are parties to continue to perform the obligations under the Service Agreements, to the extent consistent with the Anthem shared service environment described in Item 5 of Form A and to the extent otherwise practicable. However, if different senior level personnel are to perform management services under any of the Service Agreements, Anthem will provide to Blue Alliance or Patriot Life, as the case may be, prior notice and an opportunity to consult with Anthem with respect thereto. In the event that after the Closing Blue Alliance and/or Patriot Life desires to renegotiate the terms of any of the Service Agreements, Anthem will cause AHPM, Machigonne, and Northern General Services, as the case may be, to negotiate in good faith with Blue Alliance or Patriot Life, as the case may be. Although AHPM will perform the above-described duties, its control over Blue Alliance and Patriot Life will cease as follows, as more fully described in the MOU and Exhibits thereto. (1) At or before the end of two years following the Closing, it is intended and expected that all of the Service Agreements will have been terminated. (2) At or before the Closing, the Bylaw requirements for common directorships of Blue Alliance, Patriot Mutual, and BCBSME will have been eliminated, and as of the Closing, neither Blue Alliance nor Patriot Mutual will have common directors or officers with Anthem, AHPM, Machigonne or Northern General Services. (3) Given the assumption of the Service Agreements by AHPM, the business plans of each of Blue Alliance and Patriot Mutual will continue to govern their operations after Closing. However, Blue Alliance and Patriot Mutual are developing new business plans for eventual submission to the Bureau." 3. Item 1(b)(ii) is hereby amended by deleting the reference to the covenant not to compete, so that the last sentence of Item 1(b)(ii) reads in its entirety: "The anticipated role of the Trust is to fund programs having purposes consistent with 5 M.R.S.A. § 194-A(5)(B)(2)." 4. Item 1(b)(iii) is hereby amended as follows: A. The second paragraph of Item 1(b)(iii) is amended to reflect that AHPM will assume obligations under the Service Agreements upon Closing as set forth in this Amendment No. 2. B. The section of Item 1(b)(iii) entitled "Foundation Monies to Benefit Maine Citizens" is hereby amended to read as in its entirety: "In conjunction with the Acquisition, a Charitable Trust is being created that will administer considerable resources (estimated to be approximately $ 82 million) to serve Maine’s unmet health care needs, particularly and primarily with regard to medically underserved and uninsured populations and to provide access to care and improve the quality of care for those populations." 5. The first sentence of the second paragraph of Item 4(a) of Form A is hereby amended to read as follows:
SIGNATURE Pursuant to the requirements of 24-A M.R.S.A. § 222 and Chapter 180, Anthem Insurance Companies, Inc. has caused this Amendment No. 2 to be duly signed on its behalf in the City of Indianapolis and State of Indiana on the 29th day of March, 2000. ANTHEM INSURANCE COMPANIES, INC.
By:_______________________ Name: David R. Frick Title: Exec. Vice President and Chief Legal and Administrative Officer
Attest:
Signature of Officer Title
CERTIFICATION The undersigned deposes and says that he has duly executed the attached Amendment No. 2 dated March 30, 2000, for and on behalf of Anthem Insurance Companies, Inc.; that he is the Executive Vice President and Chief Legal and Administrative Officer of such company and that he is authorized to execute and file such instrument. Deponent further says that he is familiar with the instrument and the contents thereof, and that the facts therein set forth are true to the best of his knowledge, information and belief. Name: David R. Frick
CERTIFICATE OF SERVICE The undersigned hereby certifies that on March 30, 2000, a copy of Amendment No. 2 to the Form A Statement Regarding the Acquisition of Control of Domestic Insurers was served by electronic mail, or, where indicated, by hand delivery, on each of the persons listed below.
DATED: March 30, 2000 _____________________________ James B. Zimpritch, Esq. Jeffrey M. White, Esq. Catherine R. Connors, Esq. PIERCE ATWOOD Portland, Maine 04101 (207) 791-1100 Attorneys for Anthem Insurance Companies, Inc.
Anthem.BCBS.Amendment No 2 to Form A 033000.doc Last Updated: July 16, 2008 |
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