Florida Office of Insurance Regulation Authorizes Florida Blue to Change Corporate Structure, Prohibits Sale of Stock

The Florida Office of Insurance Regulation (“OIR”) issued an Order today, August 16, 2013, authorizing Blue Cross and Blue Shield of Florida, Inc., doing business as Florida Blue, to reorganize its corporate structure and move subsidiary companies within the group.  However, the Order does not authorize Florida Blue to sell stock to investors outside the Florida Blue group.  To view the new organizational structure, click here.

The approved plan allows Florida Blue to reorganize under a not-for-profit mutual insurance holding company.  Current policyholders who are members of the not-for-profit mutual insurance company known as Florida Blue will control 100 percent of the new parent not-for-profit mutual insurance holding company which will continue to control the entire group. 

Key aspects of the approved plan include:

• The Order does not approve a demutualization.
• The Order does not allow the sale of stock of Florida Blue or the newly created non-insurance stock company to investors outside of the group.
• The Order approves a restructuring of companies within the group.
• The Order permits the transfer of assets from Florida Blue to a newly created non-insurance stock company.
• The Order authorizes the creation of a new not-for-profit mutual insurance holding company that will own 100% of Florida Blue and the new non-insurance stock company.
• The new not-for-profit mutual insurance holding company will be owned by the members of Florida Blue so that the members retain control of the group.
• Eligible members must still approve the plan for it to take effect. 
• Executive compensation will not change as a result of the Reorganization.
• Health insurance rates and coverage will not change as a result of the Reorganization.
• Policyholder rebates under the Affordable Care Act are not affected by this Reorganization.
• The owners of Florida Blue will become the owners of the new not-for-profit mutual insurance holding company at the top of the organization.

The plan is still subject to approva by Florida Blue members, who will have an opportunity to vote on this transaction at the annual meeting tentatively scheduled for September 10, 2013.   Florida Blue will send notice of this meeting to its members along with proxy materials explaining the transaction.

To view a presentation containing additional information, click here.

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