Bill > SB247

This bill allows a nonprofit health care service corporation, which provides health insurance, to reorganize under the control of a nonprofit holding corporation, which is a newly created nonprofit entity that will own the health care service corporation. This reorganization is considered an internal restructuring and does not change the control of the health care service corporation or its subsidiaries. The health care service corporation can transfer certain assets, like cash or investments, to the nonprofit holding corporation, but the value of these transfers is limited to 25% of the health care service corporation's assets and is subject to financial requirements set by the Department of Insurance. Directors, officers, or employees involved in the reorganization cannot receive extra compensation for their assistance. The bill specifies that the nonprofit holding corporation itself is not considered an insurer and is subject to different regulations, while the health care service corporation continues to operate under its existing certificate of authority and subscriber contracts remain valid. The bill also includes provisions to prevent the nonprofit holding corporation from controlling or owning certain healthcare providers or specific types of health insurance entities in Alabama, with some exceptions for foreign entities.