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The New Jersey Department of Banking and Insurance (DOBI) has approved an application by Horizon Blue Cross Blue Shield of New Jersey to reorganize its corporate structure as a nonprofit mutual holding company.

The approval, effective as of Nov. 1, is subject to 11 conditions imposed by the department to ensure that Horizon operates prospectively in a manner consistent with the objectives of state law, including that Horizon act in the interest of policyholders and maintain financially safe and sound insurance subsidiaries.

In a statement issued after the DOBI decision was announced on Tuesday evening, Horizon said the decision by State Commissioner of Banking and Insurance Marlene Caride “preserves Horizon’s historic not-for-profit mission while giving the company added flexibility to adapt and better serve our members by improving healthcare quality, convenience and affordability.”

“We appreciate the complete effort that the department invested in evaluating the application and are excited to turn our focus to delivering the benefits that this reorganization will deliver to our members, customers and New Jersey’s healthcare system,” the Horizon statement said.

The application was approved under criteria outlined in state law, which says the commissioner shall approve a plan of mutualization and reorganization unless that plan is contrary to law; would be detrimental to the safety or soundness of the proposed reorganized insurer and insurance company subsidiaries of the proposed mutual holding company; or does not benefit the interests of the policyholders of the health service corporation or treats them inequitably.

The department determined that the reorganization and mutualization of Horizon met the criteria under state law for approval. DOBI based its decision on a review of the application, supporting documentation submitted by Horizon (also known as Horizon Healthcare Services, Inc.), as well as the public testimony from three public hearings, written public comments, and the entire record of the proceedings and analyses by consultants engaged by the department.

“It is important to note that under the law, the company must maintain its mission as a charitable and benevolent institution, and the state Attorney General has confirmed that any nonprofit mutual holding company formed under the law remains subject to its oversight,” Commissioner Caride said in a statement announcing the decision.

The department engaged Manatt, Phelps & Phillips, LLP and Manatt Health; Oliver Wyman Actuarial Consulting, Inc.; and Rudmose & Noller Advisors, LLC to assist the department in evaluating Horizon’s application, as permitted under the law.

The department determined that a voluntary health impact study, optional under the law, would be valuable to its evaluation. The health impact study prepared for the department by Manatt, Phelps & Phillips, LLP and Manatt Health, which may be found on the department website, examines the statutory mission and charitable status issues regarding Horizon’s restructuring and such restructuring’s potential impact on policyholders and the public.

Specifically, the health impact study reviews Horizon’s commitments made in the application, focuses on areas where the restructuring may have an impact on policyholders, and considers areas that will require ongoing department monitoring.

The health impact study concludes that Horizon’s restructuring would maintain the policyholder benefits associated with Horizon’s unique status in the New Jersey market, including explicit Horizon commitments to both its statutory mission and charitable status.

To view the application and additional public documents, visit: