THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Wednesday, June 5, 1996 TAG: 9606050347
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: 44 lines
State regulators have scheduled nine days of public hearings in mid-September to consider Trigon Blue Cross Blue Shield's plan for converting to a stock company.
The State Corporation Commission's hearings will begin Sept. 9 at the Tyler office building in Richmond and run through Sept. 20.
Richmond-based Trigon, the largest health insurer in Virginia, filed with state regulators last year to convert from a policyholder-owned organization to a profit-making company owned by shareholders.
Citing a rapid consolidation among health insurers, Trigon's management contended that the conversion is essential for the company to survive in the increasingly competitive environment. By converting to a company with publicly traded stock, Trigon could raise additional capital for acquiring other insurers.
But Trigon's conversion effort was complicated last year by a debate over how much the company should refund to the state for tax breaks it once enjoyed.
As part of an agreement with the General Assembly earlier this year, Trigon will pay the state about $175 million. Last Friday, Trigon submitted a revised plan to the SCC that reflected the agreement.
In addition to being reviewed by the SCC, Trigon's conversion plan still must be approved by its policyholders. Trigon said it will hold aspecial meeting later this year for policyholders to vote on the plan.
The insurer has about 184,000 individual policyholders and almost 16,000 group policyholders. Individuals, companies and organizations that were policyholders at the end of 1995 will be entitled to receive stock or cash in Trigon's conversion to a stock company.
Trigon will distribute an informational statement to policyholders this summer explaining the reasons for the conversion and the terms of the proposed transaction, said Brooke Taylor, a Trigon spokeswoman.
In addition to scheduling dates for its public hearings, the SCC set an Aug. 30 deadline for receiving pre-hearing briefs. The state's Bureau of Insurance and the Virginia attorney general are due to submit their testimony to the SCC on July 26, said Ken Schrad, an SCC spokesman.
KEYWORDS: TRIGON BLUE CROSS BLUE SHIELD by CNB