§ 5107a. Application for continuing authority upon merger, consolidation, transfer of control, or sale of contracts
(a) If a health maintenance organization that annually writes more than $10 million of premium in this State intends to merge into or with or consolidate with, transfer more than 10 percent of its stock or other ownership interest, to sell or dispose of all or substantially all of its assets to, or transfer more than 25 percent of its Vermont contracts to any other person, that person may succeed on a continuing basis to the authority possessed by the health maintenance organization if:
(1) A plan of merger, consolidation, or operation and an application for continuing authority is approved by the Commissioner. The application for continuing authority must comply with subsections 5102(b) and (c) of this title. The applicant shall provide such additional information as the Commissioner may require.
(2) The proposed surviving or acquiring person, if a health maintenance organization within the meaning of subdivision 5101(2) of this title, is qualified to obtain a certificate of authority under the provisions of this chapter.
(3) The proposed surviving or acquiring person is in compliance with all of the requirements of this chapter and, if licensed or authorized under any other provision of this title, is in compliance with all applicable laws of this State.
(4) The Commissioner finds that the transaction will promote the general good of the members of the health maintenance organization and the public, taking into account the effect the transaction will have on competition in this State and that the applicant is in compliance with this section.
(5) The health maintenance organization has obtained all required regulatory approvals from any other state with jurisdiction over the transaction or the Commissioner's approval is effective upon the issuance of such approvals.
(b) As used in this section, a "health maintenance organization" includes a "health maintenance organization," as defined in subdivision 5101(2) of this title, that is authorized to transact business in this State, and any person who, directly or indirectly, has the power to direct or control the policies or management of a health maintenance organization that is authorized to transact business in this State, whether through an ownership interest or otherwise and the health maintenance organization is affected by a transaction described in subsection (a) of this section. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing 10 percent or more of the voting interests of a health maintenance organization or has the power, directly and indirectly, to appoint one or more directors of the health maintenance organization.
(c) In approving the plan or application or in making findings under this section, the Commissioner may consider and rely on the record of any previous proceeding or order of the commissioner of the state of domicile of a health maintenance organization with respect to the transaction.
(d) The Commissioner may exempt from the provisions of this section any transaction that does not have a material impact on Vermont members. (Added 1997, No. 159 (Adj. Sess.), § 5, eff. April 29, 1998.)