Montana Code 50-4-717. Criteria for commissioner approval of conversion transaction
50-4-717. Criteria for commissioner approval of conversion transaction. (1) The commissioner may not approve a conversion transaction except upon a finding that the conversion transaction is in the public interest. If the attorney general or a court pursuant to 50-4-704 determines that the transaction does not involve public assets, the commissioner may not disapprove the conversion transaction under the provisions of this part.
Terms Used In Montana Code 50-4-717
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Commissioner: means the Montana state auditor and ex officio commissioner of insurance provided for in 2-15-1903. See Montana Code 50-4-701
- Contract: A legal written agreement that becomes binding when signed.
- conversion transaction: means the sale, transfer, lease, exchange, transfer by exercise of an option, optioning, conveyance, merger, affiliation, mutualization, joint venture, or other disposition by a nonprofit health entity or another person or entity resulting in the transfer of control or governance to a person or entity other than the nonprofit health entity of the lesser of:
(i)more than 10% in fair market value of the assets or operations of a nonprofit health entity; or
(ii)assets of a nonprofit health entity amounting to a fair market value of $5 million or more. See Montana Code 50-4-701
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Nonprofit health entity: means :
(i)a nonprofit health maintenance organization; or
(ii)a nonprofit health service corporation. See Montana Code 50-4-701
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See Montana Code 1-1-201
- Transferee: means the person in a conversion transaction that receives the ownership or control of the nonprofit health entity that is the subject of the conversion transaction or of the nonprofit health entity's assets. See Montana Code 50-4-701
- Transferor: means the nonprofit health entity that is the subject of the conversion transaction or the corporation that owns the nonprofit health entity that is the subject of the conversion transaction. See Montana Code 50-4-701
(2)In determining whether a conversion transaction is in the public interest, the commissioner shall consider:
(a)whether the transferor exercised due diligence in deciding to engage in a conversion transaction, selecting the transferee, and negotiating the terms and conditions of the conversion transaction;
(b)the procedures that the transferor used in making the decision, including whether appropriate expert assistance was used;
(c)whether any conflicts of interest were disclosed, including conflicts of interest of board members, executives, and experts retained by the transferor, transferee, or any other parties to the conversion transaction;
(d)whether the conversion has the likelihood of creating a significant adverse effect on the availability or accessibility of health care services or health insurance coverage in the affected community;
(e)whether the conversion transaction includes sufficient safeguards to ensure that the affected community will have continued access to affordable health care;
(f)whether any management contract under the conversion transaction is for reasonable value; and
(g)whether the conversion transaction:
(i)is equitable to the public interest, enrollees, insureds, shareholders, and certificate holders, if any, of the transferor;
(ii)is in compliance with Title 33, chapters 30 and 31;
(iii)ensures that the transferee will possess surplus in an amount sufficient to comply with the surplus required under law and provide for the security of the transferee’s certificate holders, if any, and policyholders.
(3)In making the determination required under this section, the commissioner may not determine that a conversion transaction is in the public interest unless the nonprofit health entity considered the risks of a conversion transaction, including whether a conversion transaction:
(a)would result in inefficient economies of scale; or
(b)would violate federal or state antitrust laws.
(4)If an agreement for the conversion of a nonprofit health entity requires payment of money, as liquidated damages or otherwise, in the event of a breach of the agreement by the nonprofit health entity, the commissioner shall determine whether and to what extent the payment by the nonprofit health entity is in the public interest.