THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, September 7, 1996 TAG: 9609070190
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVID M. POOLE, STAFF WRITER
DATELINE: RICHMOND LENGTH: 39 lines
An entire parking lot outside Trigon Blue Cross Blue Shield headquarters was reserved for shareholders. Inside the lobby, clerks were waiting with one-foot-thick computer printouts, ready to check off names of the 200,000 eligible Trigon shareholders.
The preparation was a mere formality: Fewer than a dozen shareholders turned out Friday morning to vote on Trigon's plan to convert from a nonprofit mutual insurance company to a for-profit stock company.
Trigon executives came into the meeting with more than enough proxies to approve the plan. The final tally was 92 percent in favor; 8 percent opposed.
The company's final step toward conversion is the State Corporation Commission, which opens hearings on Monday.
Trigon executives say they need to raise additional capital on Wall Street to compete in the rapidly changing health care industry and to expand into other Southeastern states.
``You are either the hunter or the hunted,'' said Norwood H. Davis Jr., chairman of the Trigon Board of Directors.
Consumer groups oppose the plan, saying the public will receive inadequate compensation for a charitable image and tax breaks that helped build Trigon into the state's largest health insurer.
Consumer groups also say conversion to a stock company will put pressure on Trigon to drop less-profitable lines of coverage, reducing choices for its 1.8 million policyholders.
Davis said market forces will continue to drive the trend toward cost-saving coverage such as HMOs, with or without the conversion.
``We clearly have to meet the marketplace,'' he said.
Consumer advocates acknowledge the odds of stopping the Trigon conversion are slim, particularly after Trigon pushed legislation through the General Assembly earlier this year limiting the Corporation Commission's review of the plan.
KEYWORDS: TRIGON BLUE CROSS BLUE SHIELD STOCK CONVERSION by CNB