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Regulation and Compliance > State Regulation

New York Puts Empire Conversion Bill On Web

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NU Online News Service, Jan. 18, 12:10 p.m. – The New York Legislature has put a text of S. 6084, the bill that authorizes the conversion of Empire Blue Cross and Blue Shield to a for-profit charter, on the Web, at

Other sections of the bill impose a 6% tax on nursing home bills, expand the state child insurance program, change the reimbursement rules for the state pharmaceutical assistance program and raise the pay for some public hospital employees.

Gov. George Pataki introduced the bill Tuesday through the House Rules Committee and the Senate Rules Committee. The Assembly and Senate passed the bill Wednesday on an emergency basis and sent it to Pataki for his signature.

The Senate approved the bill by a 99-36 vote, according to the Senate Web site. The Assembly vote was not immediately available.

Empire has to apply for special state permission to convert, because existing state law defines Empire as a non-profit co-operative corporation, forbids it from converting, and maintains that it holds its assets in trust for the people of New York state.

The Empire conversion section of the bill, which, technically, applies to any health care service company “which was the subject of an initial opinion and decision issued by the superintendent on or before Dec. 31, 1999,” requires Empire to give the state roughly $950 million as a “public asset,” to help pay for state government health program operating expenses. Empire must also contribute $50 million to a new charity that will support health education programs and programs to expand access to health care services.

The conversion section would require Empire to file a conversion application that would include detailed information about the finances of the company and the financing of the deal.

The bill forbids any Empire employees or directors from receiving financial inurement as a result of the conversion.

Empire would also have to discuss efforts to maintain continuity of coverage, especially for poor and elderly customers.

When the insurance superintendent decided the application was complete, regulators would have to hold at least one public hearing.

New York state court “judicial review shall be limited to a determination as to whether the superintendent acted in an arbitrary or capricious manner with respect to reaching a determination,” the bill states.


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