State keeps Florida Blue from selling stock

By BenefitsPro


By Allison Bell

Blue Cross and Blue Shield of Florida can revamp its corporate structure but cannot make moves toward converting to for-profit status, officials said Friday.

The Florida Office of Insurance Regulation has set rules for the Florida Blue structure change in an order.

Florida Blue is now a nonprofit mutual insurer.

The company has asked for permission to form a non-profit mutual insurance holding company that would own the Blue Cross and Blue Shield Association licenses that give the company the right to use the "Cross and the Shield."

The same policyholders who now govern the mutual insurance company would control the mutual holding company.

The Florida order does not give Florida Blue permission to demutualize or to sell stock in any new or existing stock company subsidiary to investors outside the group, officials said.

But Florida Blue can transfer assets to a new, non-insurance stock company within the group, and the company can create a new, nonprofit, mutual insurance holding company that will own 100 percent of Florida Blue and the new non-insurance stock company, officials said.

Eligible policyholder-members must approve the plan before it cannot take effect, and the reorganization cannot lead to a change in Florida Blue executive compensation, officials said.

The restructuring also would have no effect on Patient Protection and Affordable Care Act obligations, officials said.

Policyholders could vote on the plan Sept. 10, at Florida Blue's annual meeting, officials said.

Florida Blue officials were not immediately available to comment on the order.

Originally published on BenefitsPro.com