17:48E-44 - Rules, regulations

17:48E-44.   Rules, regulations
    The commissioner, pursuant to the "Administrative Procedure Act," P.L. 1968, c. 410 (C. 52:14B-1 et seq.), shall promulgate rules and regulations as are necessary to effectuate the provisions of this act.

   L. 1985, c. 236, s. 44, eff. July 15, 1985.
 
17:48E-45.Definitions relative to conversion
>1.As used in sections 2 through 4 of this act:

"Commissioner" means the Commissioner of Insurance.

"Conversion" means the conversion of a health service corporation to a domestic mutual insurer in accordance with the provisions of sections 2 through 4 of P.L.1995, c.196 (C.17:48E-46 through C.17:48E-48).

"Domestic mutual insurer" means an insurer as defined pursuant to N.J.S.17B:18-3.

"Health maintenance organization" means a health maintenance organization as defined pursuant to section 2 of P.L.1973, c.337 (C.26:2J-2).

L.1995,c.196,s.1.
 
17:48E-46.Conversion of health service corporation to domestic mutual insurer
2.A health service corporation which is organized pursuant to P.L.1985, c.236 (C.17:48E-1 et seq.) may convert to a domestic mutual insurer by complying with the provisions of sections 2 through 4 of this act.

a. The board of directors of a health service corporation shall adopt a resolution to become a domestic mutual insurer at a meeting of the board by a two-thirds affirmative vote of the total number of directors of the health service corporation.  A copy of the minutes of the meeting at which that resolution is adopted shall be filed with the commissioner.  The resolution shall include a plan for conversion to domestic mutual insurer, including a proposed certificate of incorporation and bylaws.  The plan shall include: 

(1) the purpose of the conversion;

(2) the effect of conversion on existing subscriber contracts issued by the health service corporation;

(3) a business plan;

(4) a provision that each policyholder shall receive any rights with respect to the mutual insurer as may be prescribed by the commissioner, provided that such rights shall not exceed the rights provided to policyholders of other domestic mutual insurers authorized to transact the business of health insurance;

(5) a provision that each policyholder shall be notified of the conversion, which notification process shall be approved by the commissioner; and

(6) a provision incorporating the recovery plan established pursuant to section 5 of P.L.1988, c.71 (C.17:48E-17.1).

b. No director, officer, agent or employee of any health service corporation shall receive any fee, commission, compensation or other valuable consideration for aiding, promoting or assisting in the conversion of the health service corporation to a domestic mutual insurer except as set forth in the plan for such conversion as required pursuant to subsection a. of this section and as approved by the commissioner.

L.1995,c.196,s.2.
17:48E-47.Filing, approval of conversion plan
3. a.  Upon the affirmative vote of the board of directors, the plan for conversion to domestic mutual insurer shall be filed with the commissioner for approval.  A public hearing thereon shall be held within 30 days after the filing, with notice provided by publication in a manner satisfactory to the commissioner.  At the expiration of 30 days after the public hearing, the commissioner shall approve the plan for filing or disapprove the plan.  The commissioner shall approve the plan unless he finds the plan:

(1) is contrary to law

(2) would be detrimental to the safety or soundness of the proposed domestic mutual insurer; or

(3) prejudices the interests of the subscribers of the health service corporation or treats them inequitably.

The commissioner shall set forth his decision in writing and shall state the reasons therefor.  A disapproval shall be subject to judicial review.

b. Upon approval of such a plan by the commissioner and the issuance of a certificate of authority to transact the business of health insurance as a domestic mutual insurer, the health service corporation shall be deemed to be a domestic mutual insurer subject to the provisions of Title 17B of the New Jersey Statutes.  All the rights, franchises and interests of the health service corporation in and to every species of property, real, personal and mixed, and choses in action thereunto belonging, shall be deemed transferred to and vested in the domestic mutual insurer, without another deed or transfer and simultaneously therewith the domestic mutual insurer shall be deemed to have assumed all of the obligations and liabilities of the health service corporation and shall hold and enjoy the same to the same extent as if the health service corporation had continued to retain title and transact business.

c. No action or proceedings pending at the time of the conversion of the health service corporation to a domestic mutual insurer to which the health service corporation may be a party shall be abated or discontinued by reason of such conversion, but the same may be prosecuted to final judgment in the same manner as if the conversion had not taken place, or the domestic mutual insurer may be substituted in place of such health service corporation by order of the court in which the action or proceedings may be pending.

d. The contracts of the health service corporation shall be converted to the policies of the domestic mutual insurer without any further action on the part of the domestic mutual insurer.  The conversion to a domestic mutual insurer shall not cause any individual health benefits plan issued prior to November 30, 1992 and still in effect to be subject to the provisions of sections 3 through 8 of P.L.1992, c.161 (C.17B:27A-4 through 17B:27A-9), except as specified in those sections, or any small employer health benefits plan issued prior to November 30, 1992 and still in effect to be subject to the provisions of section 3 of P.L.1992, c.162 (C.17B:27A-19).

e. A domestic mutual insurer that has converted from a health service corporation may apply to the commissioner for a temporary waiver of the capital and surplus requirements pursuant to sections 2 through 6 of P.L.1993, c.235 (C.17B:18-68 through 17B:18-72).  The commissioner may grant such a waiver for a period not to extend beyond December 31, 1999.

L.1995,c.196,s.3.
 
17:48E-48.Directors and officers, terms
4. a.  Public members of the board of directors of the health service corporation shall serve as directors of the domestic mutual insurer to the end of the term for which they were appointed and thereafter may be elected as directors of the domestic mutual insurer in accordance with the provisions of N.J.S.17B:18-11 through 17B:18-17.  Members of the board of directors of the health service corporation, other than such public members, shall be designated in the proposed certificate of incorporation and upon expiration of their designated terms may be elected in accordance with the provisions of N.J.S.17B:18-11 through 17B:18-17.

b. The bylaws of the domestic mutual insurer shall provide for the appointment of officers, and may provide that the officers of the health service corporation serve to the end of the term to which they were appointed under the bylaws of the health service corporation.

L.1995,c.196,s.4.