ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, June 5, 1996 TAG: 9606050029
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
The State Corporation Commission has scheduled a public hearing for Sept. 9 in Richmond on the petition from Trigon Blue Cross Blue Shield to convert from a mutual insurer to stock company.
Trigon has revised its conversion plan to match legislation passed this year by the General Assembly. The law will become effective July1.
The revised plan calls for the company to contribute about $175 million to the state when it converts from a company owned by its policyholders to one owned by investors. That figure represents Trigon's surplus on Dec. 31, 1987, the date the company's exemption on paying state tax on its premium income ended, plus $10 million.
If the conversion is approved, eligible policyholders would receive about 64 million shares of stock or, in some cases, cash. Those policyholders include about 184,000 individuals from across Virginia and about 15,700 group policyholders such as businesses, churches, local governments and schools.
The revised plan also provides for nomination by the state of two slates of candidates - one named by the General Assembly and one by the attorney general - and one director will be elected to Trigon's board from each slate.
In addition, the revised plan requires policyholders receiving stock to hold it for six months before they can sell it. This holding period is designed to help create an orderly market for the stock. The original plan would have allowed policyholders to sell half their shares after six months and the remaining shares after one year.
Trigon said it will publish notice of the public hearing in newspapers in 10 Virginia cities and in The Wall Street Journal. To receive a copy of the plan, call Trigon at (800)619-1697. The plan contains 100 pages, and Trigon had mailed about 300 copies through Tuesday.
In addition to approval by the SCC, the plan must pass a special vote of Trigon's policyholders at a meeting which has not yet been scheduled. Advance notice of the meeting will be mailed to policyholders.
LENGTH: Short : 47 linesby CNB