Banking and Insurance Committee to Consider HB 112

Highmark, IBC filings stress need for Legislature to set oversight standards

Moving quickly to close a loophole in state law, the Senate Banking and Insurance Committee has scheduled a meeting for Wednesday, May 2, to consider House Bill 112 -- legislation requiring complete oversight of non-profit health company mergers, according to Senator Don White, Committee Chairman.

Acting Insurance Commissioner Randy Rohrbaugh announced last Friday (April 27) that Independence Blue Cross (IBC) and Highmark Inc. filed papers with the Department of Insurance seeking approval of proposed changes in control of their insurance company subsidiaries upon the consolidation of the two companies.

Under current state law, Department of Insurance approval is only required for mergers involving for-profit companies, which could include some of the subsidiary entities. The merger of the parent non-profit companies does not currently require state approval under state law.

Senator White is the prime sponsor of Senate Bill 550, which would require state approval of non-profit health insurance companies. That bill was approved by the Senate in March. A companion piece, HB 112, was approved by the House last week and will be considered by Senator White's Banking and Insurance Committee at a meeting set for 10 a.m., Wednesday, May 2, in Room 8E-B of the Capitol East Wing.

"Now that the merger papers have been filed with the Department of Insurance, it heightens the need to complete the legislative process by enacting either House Bill 112 or Senate Bill 550 to ensure the appropriate oversight process is in place," Senator White said.

The applications and related materials filed by IBC and Highmark are available for review on the Department of Insurance web site . Go to www.insurance.state.pa.us and click on "Highmark/IBC Filing."

"It is essential that we put the appropriate legislative oversight procedures in place," Senator White said. "This course of action must be transparent and open to public review. With that in mind, we are beginning the process of establishing a series of hearings on the merger to be held in the coming months."

Contact:

Joe Pittman
(717) 787-8724