An insurance regulator is asking questions about a company’s efforts to transfer the domicile of a subsidiary.
Washington state Insurance Commissioner Myron Kreidler says he wants to hold a hearing on a request from Life Health Plan of Arizona to move its state of domicile to Arizona, from Washington.
LifeWise of Arizona is a for-profit subsidiary of Premera Blue Cross, Mountlake Terrace, Wash., a nonprofit carrier that provides or administers health coverage for 32,000 Arizona residents.
Kreidler temporarily suspended Premera’s authority to sell new LifeWise business in Arizona in August. Kreidler said he believes Premera’s 1.5 million Washington state customers are subsidizing a money-losing operation in Arizona.
LifeWise is paying $1.58 on claims in Arizona for every premium dollar it collects in the state, according to officials in Kreidler’s office.
Premera contends that efforts to build LifeWise or Arizona are on track, and that the subsidiary will be able to cover its own direct costs by 2010.
Kreidler lifted the ban on new LifeWise sales in Arizona Aug. 24, 8 days after he issued it, after Premera and LifeWise supplied more financial information and verbal assurances that LifeWise has a plan for lowering the loss ratio in Arizona to less than 100%.
Kreidler has not yet set a date for the proposed hearing on the domicile transfer request.
If the subsidiary changes domicile, Kreidler would lose regulatory oversight over the company’s financial condition, Kreidler says.