Exhibit 99(b)
SETTLEMENT AGREEMENT
1. Parties. The parties (collectively, "the Parties") to
this Settlement Agreement ("this Agreement") are Xxx Xxxxxx,
Director of the Department of Insurance of the State of Missouri
("the Director of Insurance"), and Blue Cross Blue Shield of
Missouri, HMO Missouri, Inc., d/b/a Blue Choice, and Healthy
Alliance Life Insurance Company ("HALIC")(referred to
collectively in this Agreement as "Alliance BCBSMO").
2. Purposes. The Parties are parties to administrative
proceedings styled In re: Blue Cross Blue Shield of Missouri et
al., No. 98-02-09-00C and Market Conduct Examination No. 1716-
0795-TGT (collectively the "Market Conduct Proceedings"). The
Market Conduct Proceedings are administrative proceedings brought
by the Department of Insurance. The purpose of this Agreement is
to effect an amicable resolution of the disputes presented in the
Market Conduct Proceedings as part of a complete settlement of
issues of law pending before the Missouri Department of Insurance
and in the courts of the State of Missouri.
3. Execution of Stipulation of Settlement. The Parties
agree that upon the satisfaction of the condition precedent
described in paragraph 6 of this Agreement, and in consideration
of their mutual undertakings in this Agreement and in that
separate Settlement Agreement (the "Main Settlement Agreement")
executed this date by and among Xxxxxxxx X. "Xxx" Xxxxx, Attorney
General of the State of Missouri; The Missouri Department of
Insurance and Xxx X. Xxxxxx, its Director; Blue Cross and Blue
Shield of Missouri and RightCHOICE Managed Care, Inc., they shall
execute a "Stipulation of Settlement" in the form attached as
Exhibit A to this Agreement.
4. Disposition of Market Conduct Proceedings. The Market
Conduct Proceedings shall be resolved as follows.
(a) The Director of Insurance shall take such actions as are
necessary to hold the Market Conduct Proceedings in abeyance
until the earlier of such time as the condition precedent
described in paragraph 6 of this Agreement has been satisfied or
this Agreement is terminated.
(b) Immediately upon execution of the Stipulation of Settlement,
the Market Conduct Proceeding shall be dismissed as provided for
in the Stipulation of Settlement.
5. Release. In consideration of the undertakings of Alliance
BCBSMO herein, the Director of Insurance does release the
entities referred to in this Agreement as Alliance BCBSMO, and
all of their respective officers, agents, affiliates successors
and assigns, from all claims, causes of action, liabilities and
judgments that were asserted or might have been asserted in the
Market Conduct Proceeding. This Release will be effective as of
the date of satisfaction of the condition precedent described in
paragraph 6 of this Agreement.
6. Court Approval of Principal Settlement. It is a condition
precedent to this Agreement that the condition precedent
described in the paragraph identified as "7. Court Approval of
Settlement" in the Main Settlement Agreement shall have been
satisfied. This Agreement shall automatically terminate upon
termination of the Main Settlement Agreement.
7. General Provisions.
(a) Each person executing this Agreement, by his or
her signature hereto, warrants that he or she has authority to
execute this Agreement on behalf of his or her principal.
(b) This Agreement is a good faith, negotiated
resolution of disputed claims. Neither this Agreement nor any
act performed or document executed pursuant to or in furtherance
of this Agreement is admissible in any court proceeding, except
any proceeding seeking enforcement of this Agreement. No party,
by signing this Agreement, admits liability or fault, or admits
the validity of any claim made by any other party or position
taken by any party with respect to any matter that is the subject
of this Agreement.
(c) Captions contained in this Agreement have been
inserted here only as a matter of convenience and in no way
define, limit, extend or describe the scope of this Agreement or
the intent of any provisions hereof.
(d) This Agreement may be executed by the Parties on
any number of separate counterparts, and all such counterparts so
executed constitute one agreement binding on all the Parties
notwithstanding that all the Parties are not signatories to the
same counterpart.
(e) This Agreement and Exhibit A attached hereto
(along with Paragraph 7 of the Main Settlement Agreement)
constitute the entire agreement among the Parties pertaining to
the subject matter hereof. It supersedes all prior agreements,
letters of intent, understandings, negotiations, and discussions
of the Parties, whether oral or written relating to the same
subject matter.
(f) The Parties will execute and deliver such further
documents and do such further action things as may be required to
carry out the intent and purpose of this Agreement.
(g) This Agreement and the rights and obligations of
the Parties hereunder are to be governed by and construed and
interpreted in accordance with the laws of the State of Missouri
applicable to contracts made and to be performed wholly within
Missouri, without regard to choice or conflict of law or rules.
(h) This Agreement is binding upon and inures to the
benefit of the Parties, and their respective legal
representatives, successors and assigns.
Executed this 20th day of September, 1998.
BLUE CROSS AND BLUE SHIELD OF MISSOURI
By: /s/ Xxxx X. X'Xxxxxx
Xxxx X. X'Xxxxxx, President and Chief Executive Officer
HEALTHY ALLIANCE LIFE INSURANCE COMPANY
By: /s/ Xxxx X. X'Xxxxxx
Xxxx X. X'Xxxxxx, Chairman and President
HMO MISSOURI, INC.
By: /s/ Xxxx X. X'Xxxxxx
Xxxx X. X'Xxxxxx, Chairman
MISSOURI DEPARTMENT OF INSURANCE
By: /s/ Xxx Xxxxxx
Xxx Xxxxxx, Director
EXHIBIT A
STIPULATION OF SETTLEMENT
RE: Market Conduct Examination #1716-0795-TGT and Case #98-02-09-001C
It is hereby stipulated and agreed by Xxx Xxxxxx, Director
of the Missouri Department of Insurance, hereinafter referred to
as "Director," and Blue Cross Blue Shield of Missouri, HMO
Missouri, Inc. doing business as Blue Choice and Healthy Alliance
Life Insurance Company and their successors and assigns,
hereinafter collectively referred to as "Alliance BCBSMO", as
follows:
WHEREAS, Xxx Xxxxxx is the Director of the Missouri
Department of Insurance, an agency of the State of Missouri,
created and established for administering and enforcing all laws
in relation to insurance companies, health service corporations
and health maintenance organizations doing business in the State
of Missouri; and,
WHEREAS, the State of Missouri has granted to Alliance
BCBSMO certificates of authority to transaction the business of
insurance in the State of Missouri; and
WHEREAS the Director conducted a market conduct examination
of Alliance BCBSMO and prepared report number 1716-0795-TGT; and
WHEREAS as a part of a complete settlement of issues of law
pending before the Missouri Department of Insurance and the civil
courts of Missouri, Alliance BCBSMO agrees to take the following
remedial actions regarding the findings made in the report of the
market conduct examination:
1. For its health benefit plans governed by the Small
Employer Health Insurance Availability Act at Section 379.930 et
seq., RSMo (1994), Alliance BCBSMO shall permit the renewal of
such health benefit plans at the option of the small employer as
required by Section 379.938, RSMo (1994), except for those cases
in which said law allows for a nonrenewal.
2. For its health benefit plans governed by the Small
Employer Health Insurance Availability Act at Section 379.903 et
seq., RSMo (1994), Alliance BCBSMO shall charge premium rates
within the limitations required by Section 379.936, RSMo (1994).
3. For its health benefit plans governed by the Small
Employer Health Insurance Availability Act at Section 379.930 et
seq., RSMo (1994), Alliance BCBSMO shall not refuse to offer the
standard and basic plans to any employer group based upon the
employer's industry or the age of the group's employees.
4. In processing its claims under any health benefit plan
which provides for expense participation with the insured,
Alliance BCBSMO shall compute the shared charges or copayment
based upon the actual payments made to the health service
provider as required by Regulation 20 CSR 100-2.300.
5. Alliance BCBSMO shall offer a converted policy to any
individual employee or member whose insurance coverage under a
group policy has terminated. Such individual policy provisions
shall provide the options and minimum benefits as required by
Section 376.397, RSMo (1994).
6. Alliance BCBSMO shall track all realized savings gained
from the coordination of benefits whenever the plan issued by
Alliance BCBSMO is secondary to another group insurance plan and
BCBSMO shall apply the savings to previous and subsequent claims
made during the same claims determination period as required by
Regulation 20 CSR 400-2.030 or otherwise cover those amounts that
would be covered by applying the savings gained from the
coordination of benefits.
7. Alliance BCBSMO shall use the most recent definitions
of "Complications of Pregnancy" and "Maternity Benefits" that
have been filed with and approved by the Missouri Department of
Insurance.
8. Alliance BCBSMO shall have procedures in place to
assure that it does not use policy forms prior to the approval by
the Missouri Department of Insurance as required by Section
354.085, 354.405.4, 376.405, and 376.777.7, RSMo (1994).
9. Alliance BCBSMO shall have procedures in place to
assure that it is able to maintain its records such that the
Missouri Department of Insurance may readily ascertain the
companies' business practices as required by Regulation 20 CSR
300-2.200(2).
10. Alliance BCBSMO shall distribute copies of benefit
booklets to its subscribers if the actual booklets are
temporarily unavailable.
WHEREAS, in consideration of the corrective measures agreed
to by Alliance BCBSMO as stated above, Director hereby dismisses
with prejudice all claims asserted by the Missouri Department of
Insurance in case number 98-02-09-001C filed February 11, 1998
and its April 1996 market Conduct Report 1716-0795-TGT.
Date:
XXX XXXXXX, Director
Missouri Department of Insurance
Date:
President
Blue Cross Blue Shield of Missouri
Date:
President
HMO Missouri, Inc.
Date:
President
Healthy Alliance Life Insurance Company
