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PA Bulletin, Doc. No. 04-1465


Reserve and Surplus Levels of Hospital Plan and Professional Health Services Plan Corporations; Application Update; Notice 2004-07

[34 Pa.B. 4340]

   As set forth in Notice 2004-01, published on January 17, 2004 at 34 Pa.B. 458, the Insurance Department (Department) previously directed Capital Blue Cross, Highmark, Inc. d/b/a Highmark Blue Cross Blue Shield and d/b/a Pennsylvania Blue Shield, Hospital Service Association of Northeastern Pennsylvania d/b/a Blue Cross of Northeastern Pennsylvania and Independence Blue Cross (collectively, Blues Plans) to make applications for approval of the reserves and surpluses they maintain pursuant to, inter alia, 40 Pa.C.S. Chapters 61, 63 (relating to health plan corporations). In its application, each Blues Plan was directed to address what is an appropriate maximum surplus level for that Plan, and where appropriate, offer a business plan on how any surplus that exceeds the maximum level would be used.

   Initially, the Department intended to make the applications available for public inspection on April 15, 2004. However, issues were presented in a lawsuit captioned Capital Blue Cross and Blue Cross of Northeastern Pennsylvania v. Insurance Department and M. Diane Koken, Insurance Commissioner, No. 172 MD 2004 (Cmwlth. Ct.) which prevented publication of the applications as planned. However, the Court has now ruled that the applications, with limited exceptions, may now be made available for public comment and may not be maintained by the Blues Plans as confidential.

   The applications and certain other supplemental documents are now available on the Department's website ( Those materials will also be made available in the Department's public room and regional offices for inspection and copying.

   A thirty (30) day public comment period will officially commence on August 16, 2004. Interested parties are invited to submit written comments regarding the applications on or before September 14, 2004, to Blues Reserve/Surplus Application, Insurance Department, Office of Insurance Product Regulation and Market Enforcement, 1311 Strawberry Square, Harrisburg, PA 17120, (717) 787-4192, An index of all public comments submitted will be posted and periodically updated on the Department's website.

   The Department views the public input as a necessary and integral part of its evaluation of the applications and therefore encourages public comment. Determinations on the applications are intended to be issued promptly after there has been opportunity to consider all the public comments. The Department may also make further inquiries, audits and investigations, and may require the submission of such supplemental studies and information, as it deems necessary or proper, to enable it to reach a determination.

Insurance Commissioner

[Pa.B. Doc. No. 04-1465. Filed for public inspection August 6, 2004, 9:00 a.m.]

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