New York State
New York, August 10, 1998
DEPARTMENT RELEASES FINANCIAL REPORT ON OXFORD HEALTH PLANS
Company Adds $152 Million into Surplus to Protect Policyholders
Superintendent of Insurance Neil D. Levin today announced that at the direction of the Department, Oxford Health Plans has added $152 million into its surplus providing additional funds to pay outstanding claims. This action by Oxford is a direct response to concerns raised by the Department in its latest financial condition report.
"We are pleased that Oxford has promptly addressed our concerns and we will continue to address issues as they arise in Oxfords ongoing restructuring effort," said Superintendent Levin. "This additional $152 million cash infusion into the New York companies, combined with recent key management changes, are major steps in the rebuilding process. The enhanced combination of resources and talent should strengthen Oxfords position in the marketplace."
Superintendent Levin was informed that Oxford will disclose its second quarter results tomorrow and that this enhancement constitutes a portion of the restructuring charges being taken by Oxford Health Plans, Inc.
The financial condition report, which the Department released today, is the culmination of a multi-faceted examination by the Department into the companys finances, overall operations, management structure, and claims processing procedures. In December 1997 the Department completed its market conduct investigation, which revealed significant problems at the company and uncovered numerous violations of the New York State Insurance Law. As a result, Oxford was fined a record $3 million fine and ordered to pay an additional $500,000 in restitution to providers and subscribers.
The New York Department will continue to monitor Oxford, including their treatment of subscribers and providers, rate and other filings, and their compliance with all provisions of the insurance law.
In response to recommendations by the Department in last years market conduct report, Oxford has made significant changes to its operations, including strengthening its management team at both the parent company and the New York subsidiaries, improving information systems and compliance. This additional $152 million cash infusion to protect policyholders builds on those improvements.
Superintendent Levin also announced that as of June 30, 1998, Oxfords New York subsidiaries are in full compliance with all of the states financial requirements -- based on the most recent financial statement provided to the Department.
A copy of the Departments financial condition report is available upon request.