New York State
Insurance Department




          The New York State Department of Insurance today announced regulatory approval of Empire Blue Cross and Blue Shield’s September 26, 2002 amended plan to convert to an Article 42 for-profit company. The Department has issued a formal Opinion and Decision that can be obtained at

          On August 6th and 7th of this year, the Department held public hearings on Empire’s June 18, 2002 formal Plan of Conversion. As a result of the testimony heard and submitted at the hearings, the Department ordered changes to be made to the Plan to protect policyholders and an amended plan was submitted on September 26, 2002. The amended Plan contains many important changes to the Plan of Conversion including:

  1. Individual Direct Pay indemnity products-For the first 3 years from the conversion effective date, New Empire must still comply with rules applicable to an Article 43 (non-profit) corporation. In addition, New Empire (the new Article 42 for-profit insurer) must gain prior approval from the Department following a public hearing for rate increases above 10%.
  2. Medicare Supplemental Policies-With respect to current and future policyholders, the medical loss ratio for file and use must be at least 80% (otherwise applicable to non-profit Article 43 corporations) for the first eight years after the conversion effective date--the former conversion plan called for a five-year period. Additionally, for the first five years, rate increases of over 10% will require prior approval from the Department following a public hearing.

The Department’s decision was based on three elements-- that the conversion:

          Copies of the revised plan are available on Empire HealthChoice Inc.’s Web site at