BEFORE
THE COMMISSIONER OF INSURANCE
OF THE STATE OF
KANSAS
In the Matter of the Conversion and )
Acquisition of Blue Cross and Blue Shield ) Docket
No. 3014-DM
of
Kansas, Inc. )
Notice of Public Hearing
You are hereby notified that Kathleen Sebelius, the Kansas Commissioner of Insurance, will hold a public hearing on the proposed Plan of Conversion and Acquisition (the "Plan") of Blue Cross and Blue Shield of Kansas, Inc., a Kansas mutual insurance company ("BCBSKS") pursuant to Kansas Statutes Annotated §§ 40-4004, 40-3304(d)(1) and 77-501 et seq. The Commissioner will hold the hearing between the hours of 9:00 A.M. and 5:00 P.M. beginning on the following dates and at the following place:
January 7-9, 2001
Capital Plaza Hotel
Emerald Ballroom
1717 S.W. Topeka Boulevard
Topeka, Kansas
Eligible policyholders qualified to vote on the Plan and any
other interested persons may attend. You do not need to appear at the public
hearing or submit any statements to the Commissioner to continue your insurance
policy, or to vote on the plan (if you are qualified to vote).
Any party who fails to attend or participate in a prehearing conference, hearing or other stage of an adjudicative proceeding my be held in default pursuant to K.S.A. 77-520 of the Kansas Administrative Procedure Act. If you are unable to attend the proceedings, notify the Commissioner immediately.
Under the proposed Plan, BCBSKS would convert from a mutual insurance company to a stock insurance company. The Plan would provide for, and be contingent upon, the acquisition of all BCBSKS stock by Anthem West, Inc. ("Anthem BCBS") at the same time as the conversion pursuant to the terms and conditions of an Alliance Agreement between BCBSKS and Anthem BCBS. Together, this conversion and acquisition are sometimes referred to as a "sponsored demutualization." The purpose of the hearing is to receive comments, information and other evidence based upon which the Commissioner will decide whether to approve or disapprove the Plan. The effectiveness of the Plan is subject to the Commissioner's approval. Under the statute, the Commissioner shall approve the conversion if she finds that:
(1) The plan of conversion is fair and equitable to policyholders;
(2) the plan of conversion complies with the provisions of the conversion statute;
(3) the plan of conversion does not unjustly enrich any director, officer, agent or employee of BCBSKS; and
(4) the new stock insurer would meet minimum requirements to be issued a certificate of authority by the Commissioner to transact business in this state and the continued operations of the new stock insurer would not be hazardous to existing or future policyholders or the public.
The statute requires that the Commissioner approve the acquisition unless she finds that:
(A)After the change of control BCBSKS would not be able to satisfy the requirements for the issuance of a license to write the lines of insurance for which it is presently licensed;
(B)Anthem BCBS’ financial condition is such as might jeopardize the financial stability of BCBSKS or prejudice the interest of its policyholders;
(C)Anthem BCBS’ plans or proposals to liquidate BCBSKS, sell its assets or consolidate or merge it with any person, or to make any other material changes in its business or corporate structure or management, are unfair and unreasonable to BCBSKS' policyholders and not in the public interest;
(D)the competence, experience and integrity of those persons who would control the operation of BCBSKS are such that it would not be in the interest of BCBSKS' policyholders and of the public to permit the merger or other acquisition of control; or
(E)the acquisition is likely to be hazardous or prejudicial to the insurance-buying public.
Subject to Kansas Statutes Annotated § 77-523(c), any interested
person who is not a party may make oral or written statements or comments upon
the proposed conversion and acquisition at the hearing to be included in the
formal record for these proceedings.
While all those who wish to testify may do so, the Commissioner may, in
order to accommodate all interested persons, limit the time that any individual
or group may speak.
Any person wishing to testify at the public hearing should register with the Commissioner between the hours of 9:00 A.M. and 5:00 P.M. Central Standard Time on or before January 2, 2002, five (5) days before the public hearings. Written statements, under oath, may also be sent to the Commissioner if an interested person is unable to or does not wish to attend the public hearing. Interested persons should contact:
Brent Getty
Staff Attorney
Kansas Insurance Department
420 S.W. 9th St.
Topeka, KS 66612-1678
(785) 368-7164
The location of the public hearing is accessible to people with disabilities. Please contact the Commissioner's office to make arrangements for special accommodations. All written statements submitted under oath must be received prior to the close of the public hearing in order for any such written statement to be included in the public hearing record.
Information about this proposed sponsored demutualization is available on Blue Cross' web site at www.bcbsks.com, or by calling Blue Cross' Policyholder Information Center toll-free at 1-800-756-8400.
IT IS SO ORDERD.
Dated: November 9, 2001
KATHLEEN SEBELIUS
Commissioner of Insurance
NOTIFICATION OF SERVICE
A true and correct copy of the foregoing Notice of Public Hearing dated November 9, 2001, has this 9th day of November 2001, been sent to the below identified counsel or parties.
________________________________________
SERVICE LIST
Kathy Greenlee, Esq.
General Counsel
Kansas Insurance Department
420 S.W. 9th Street
Topeka, Kansas 66612-1678
(785) 296-3071
(785) 296-2283 Fax
COUNSEL FOR THE KANSAS INSURANCE DEPARTMENT
Patrick H. Cantilo, Esq.
Cantilo & Bennett, L.L.P.
7501 C. North Capital of Texas Highway, Suite 200
Austin, Texas 78731
(512) 478-6000
(512) 404-6550 Fax
COUNSEL FOR THE KANSAS INSURANCE DEPARTMENT
Gary D. McCallister, Esq.
Gary D. McCallister & Associates, Ltd.
29 S. La Salle Street, Suite 1210
Chicago, Illinois 60603
(312) 345-0611
(312) 345-0612 Fax
COUNSEL FOR BLUE CROSS AND BLUE SHIELD OF KANSAS, INC.
James C. Scoville, Esq.
Debevoise & Plimpton
919 Third Avenue
New York, New York 10022
(212) 909-6655
(212) 909-6836 Fax
COUNSEL FOR BLUE CROSS AND BLUE SHIELD OF KANSAS, INC.
Doug Fauth, Esq.
Anthem Blue Cross and Blue Shield
120 Monument Circle
Indianapolis, Indiana 46204-4903
(317) 488-6259
(317) 488-6891 Fax
COUNSEL FOR ANTHEM BLUE CROSS AND BLUE SHIELD
Randy J. Forbes, Esq.
Frieden, Haynes & Forbes
555 S Kansas Ave, Suite 303
P.O. Box 639
Topeka, Kansas 66601-0639
(785) 232-7266
(785) 232-5841 Fax
COUNSEL FOR ANTHEM BLUE CROSS AND BLUE SHIELD
Douglas S. Laird, Esq.
Polsinelli, Shalton & Welte PC
700 W 47th St, Suite 1000
Kansas City, MO 64112-1802
(816) 360-4341
(816) 753-1536 Fax
COUNSEL FOR KANSAS MEDICAL SOCIETY
Jerry Slaughter
Kansas Medical Society
623 SW 10th St
Topeka, KS 66612
(785) 235-2383
(785) 235-5114 Fax
EXECUTIVE DIRECTOR FOR KANSAS MEDICAL SOCIETY
Charles R. Hay, Esq.
Goodell, Stratton, Edmonds & Palmer LLP
515 S. Kansas Ave.
Topeka, KS 66603-3999
(785) 233-0593
(785) 233-8870 Fax
COUNSEL FOR KANSAS HOSPITAL ASSOCIATION
Donald Wilson
Kansas Hospital Association
215 SE 8th Ave.
Topeka, KS 66603
(785) 233-7436
(785) 233-6955 Fax
PRESIDENT FOR KANSAS HOSPITAL ASSOCIATION
Karen A. Eager, Esq.
Law Offices of Theodore J. Lickteig
16 E. 13th St.
Lawrence, KS 66044
(785) 842-6401
(785) 842-8258 Fax
COUNSEL FOR KANSAS STATE NURSES ASSOCIATION & KANSAS ASSOCIATION OF THE MEDICALLY UNDERSERVED
Terri Roberts
Kansas State Nurses Association
1208 SW Tyler
Topeka, KS 66612-1735
(785) 233-8638
(785) 233-5222 Fax
EXECUTIVE DIRECTOR FOR KANSAS STATE NURSES ASSOCIATION
Joyce Volmut
Kansas Association for the Medically Underserved
112 SW 6th St.
Topeka, KS 66603
(785) 233-8483
(785) 233-8403 Fax
EXECUTIVE DIRECTOR FOR KANSAS ASSOCIATION FOR THE MEDICALLY UNDERSERVED