In a first-of-its-kind move, the national Blue Cross and Blue Shield Association is contesting the planned for-profit conversion of Blue Cross and Blue Shield of North Carolina, Chapel Hill, and says it will strip the insurer of its trademark if the plan proceeds as outlined. The conversion plan does not comply with the national association's rules, which stipulate that neither a foundation nor an individual investor can control more than 5% of a Blues plan's shares, the organization said in a July 29 letter to the state's attorney general and Department of Insurance. Under a 1998 law, the North Carolina Blues is required to issue stock representing 100% of its value to an independent foundation if the insurer converts to for-profit status. The foundation would thereby, at least initially, wield full control of the state's Blues plan. To meet the requirements of both the association and the state law, the Blues is now proposing to place 95% of the foundation's stock into a voting trust. Then the foundation would control one share less than 5%. -- by Laura B. Benko
Blues association contests N.C. plan's conversion
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