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CHANGE IN NEW JERSEY REGULATION OF MANAGED CARE ORGANIZED DELIVERY SERVICES, HEALTH CARE THIRD PARTY ADMINISTRATORS AND THIRD PARTY BILLING SERVICES: AN UPDATE
Cynthia J. Borrelli, Esq. There is significant commentary on the fiduciary duties of directors of public companies in mergers, acquisitions, takeovers and tender offers. Although a substantial body of case law has been generated from transactions involving public companies, the sale of control triggers essentially the same fiduciary duties for directors of public companies and non-public companies alike. The board’s duty to maximize the target company’s value for the benefit of shareholders/members often results in the utilization of market check mechanisms. Transactions that involve the change of control of an insurance company trigger a regulatory approval process under state counterparts of the NAIC Model Insurance Holding Company System Regulatory Act (the “Holding Company Act”). This article explores the interface between market check mechanisms and the state insurance regulatory process.
MERGER OF IOWA MUTUAL INSURERS
Kent M. Forney, Esq. Iowa lawyers and their clients have been uncertain for years about the procedural requirements and substantive basis for the merger or joinder of two mutual insurers. The Iowa Insurance Division has recognized this uncertainty and in a joint effort with several interested lawyers has created a major revision of a Chapter of the Iowa Code to provide both procedural and substantive certainty. In order to understand the new legislation, it is helpful to review the history of the issue.
KANSAS ENACTS THE SELF-AUDIT PRIVILEGE
Steve Imber, Esq. Kansas recently enacted H.B. 2357, which makes self-evaluative audits conducted by insurance companies privileged information and not subject to discovery in any civil, criminal, or administrative proceeding. This privilege does not extend to exclude evidence, including records or information, at hearing or trial that is uncovered during the internal audit. The privilege only protects the audit document itself, as well as the person or persons doing the audit.
LIFE INSURANCE AND THE EROSION OF THE INSURABLE INTEREST REQUIREMENT
Douglas A. Mang, Esq. Wendy Russell Wiener, Esq. Richard J. Santurri, Esq. Third party ownership of life insurance policies is a concept whose time has come, and it’s among the hottest issues within the industry. However, will it have the staying power to survive the negative public policy implications? Clever investors armed with complicated programs, which, in theory and form, resemble traditional estate planning vehicles, whereby parties or entities unrelated to the subject insured own, usually indirectly, majority interests in life insurance policies on insureds, are finding a niche in the investment marketplace. These products are often purchased at a price well below the face value of the policy, creating the potential for returns that are significantly higher than many other investment vehicles. Investors take comfort in knowing death is certain, and life insurance policies written by established companies are secure investments. There is additional comfort in knowing the policies can usually be sold in the secondary market.
COMPETITION AND INSURANCE RATE REGULATION: TEXAS STYLE
Jay A. Thompson, Esq. Insurance regulation has always been a little different in Texas. Since the early 1900s, Texas state government has been immersed in setting insurance prices. This was largely due to concerns that insurers might cut prices to unsustainably low levels to the point where insolvencies would result. In competitive markets, government intervention may be needed to protect against “inadequate” rates and seldom, if ever, necessary to call rates “excessive.” Texas has also been a state that engages in “insurance reform” on a regular basis. Despite all of the political rhetoric surrounding reform, Texas has gradually been moving to adopt laws that seem to rely more on competitive markets to act as a regulator of prices in the business of insurance.
NON-LICENSEE INTERNET ADVERTISING AND REFERRALS
Marc M. Tract, Esq. Insurance regulation has always been a little different in Texas. Since the early 1900s, Texas state government has been immersed in setting insurance prices. This was largely due to concerns that insurers might cut prices to unsustainably low levels to the point where insolvencies would result. In competitive markets, government intervention may be needed to protect against “inadequate” rates and seldom, if ever, necessary to call rates “excessive.” Texas has also been a state that engages in “insurance reform” on a regular basis. Despite all of the political rhetoric surrounding reform, Texas has gradually been moving to adopt laws that seem to rely more on competitive markets to act as a regulator of prices in the business of insurance. |
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