Bill > HB391

This bill allows a nonprofit health care service corporation, which is a type of organization that provides health services to its members, to reorganize under the control of a nonprofit holding corporation, which is a newly formed nonprofit corporation 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, nor is it considered an acquisition. As part of this reorganization, 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 admitted assets and must comply with risk-based capital requirements set by the Department of Insurance. Directors, officers, or employees involved in the reorganization cannot receive any extra compensation for their assistance. The nonprofit holding corporation itself will not be considered an insurance company and will be subject to different regulations than the health care service corporation it controls. The bill also specifies that the board of directors of the nonprofit holding corporation must consist of individuals who are already directors of the health care service corporation, and no one involved can receive equity or ownership interests. The Department of Insurance will oversee compliance with these new provisions. The reorganization will not alter the health care service corporation's legal form or its authority to operate, and existing contracts will remain valid. The bill will become effective on October 1, 2026.

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