Blue Cross and Blue Shield of Florida Inc. (Florida Blue) wants to revamp its corporate structure.
The nonprofit, policyholder-owned mutual insurer wants to become a stock company, NewCo Holding Company, that would be controlled by a new, policyholder-owned mutual insurance holding company.
Florida Blue also would form a new, nonprofit foundation, BCBSF Foundation Inc., and it would form a unit, BCBS of Florida Inc, doing business as Florida Blue, that would control company units such as National Institute for Health Care Management L.L.C., Capital Health Plan Inc., Health Intelligence Company L.L.C., and two investment funds, BCBS Ventures II Inc. and BCBS Ventures II L.P.
Florida Blue provides or administers health coverage for about 4 million people. It generated $217 million in net income for 2012 on $9.1 billion in revenue, compared with $219 million in net income on $8.3 billion in revenue for 2011.
Florida Blue has not talked about having any immediate plans to sell stock in the stock company to the public, according to J.P. Morgan Securities L.L.C., which prepared an opinion on the deal for the Florida Blue board.
Before Florida Blue could complete the deal, it would have to get approval from a majority of votes cast by eligible members, the approval of the Florida insurance commissioner, a “no-action” letter from the U.S. Securities and Exchange Commission, and an opinion from an independent tax advisor or a private letter ruling from the Internal Revenue Service on conversion-related tax matters, J.P. Morgan Securities said.
The insurance holding company could use the new stock company subsidiary to issue stock, issue bonds, and participate in mergers and acquisitions, according to J.P. Morgan Securities.
The reorganization would help the holding company “to make investments that may otherwise be limited under the present corporate structure,” the firm said.
The Florida Office of Insurance Regulation has announced plans to hold a public hearing on the reorganization application in Miami at 5:30 p.m. July 25.