Pa. Gov. Urges Thorough State Review of Health Insurer Merger

June 1, 2007

Pennsylvania Governor Edward G. Rendell has renewed his call for a change in law to permit an in-depth state review of the proposed merger of Independence Blue Cross and Highmark Inc., Pennsylvania’s two largest health insurers.

His call came following the opinions issued this week by the Federal Trade Commission and Department of Justice.

“These federal agencies did not approve the merger, they said only that they did not find any federal antitrust or competitive concerns, and granted the companies’ request to terminate the 30-day waiting period,” Rendell said. “This is an important distinction and it is one that means Pennsylvania’s review of the proposed merger will need to be very thorough.”

In a typical insurance company merger or consolidation, the state Department of Insurance would look at specific standards related to solvency, business plans and management, as well as the impact the transaction would have on competition and the consumer.

However, under current state law, Pennsylvania’s Blue Plans and fraternal benefit societies are exempted from those standards of review at the holding company level.

Rendell wants to remove that exemption.

“I am again calling on the General Assembly to swiftly enact clean legislation to give the Department of Insurance greater legal authority to more closely review proposed transactions of this type,” Rendell added. “Doing so will enhance and strengthen our ability to protect health insurance consumers across the state.”

Source: Govenor’s Office

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