§ 17:48E-49 — Definitions relative to conversion of health service corporation to domestic stock insurer.

1. As used in this act: "Affiliate" or "affiliated" has the meaning set forth in subsection a. of section 1 of P.L.1970, c. 22 (C.17:27A-1). "Alternative foundation plan" means the plan submitted to the Attorney General and the commissioner pursuant to section 18 of this act. "Application" means the application for approval of a plan of conversion filed with the commissioner pursuant to section 3 of this act. "Attorney General" means the Attorney General of the State of New Jersey. "Commissioner" means the Commissioner of Banking and Insurance. "Control" has the meaning set forth in subsection c. of section 1 of P.L.1970, c. 22 (C.17:27A-1). "Conversion" means the process by which a health service corporation converts to a domestic stock insurer in accordance with the provisions of sections 2 through 14 and section 19 of this act. "Converted insurer" means the domestic stock insurer into which a health service corporation converts in accordance with the provisions of sections 2 through 14 and section 19 of this act. "Domestic stock insurer" means a for-profit stock insurer authorized pursuant to Title 17B of the New Jersey Statutes to transact health insurance as defined in N.J.S.17B: 17-4. "Effective time" means the date and time at which the conversion of a health service corporation is effective, as provided in section 11 of this act. "Foundation" means the foundation or foundations established under section 18 or 19 of this act. "Foundation plan" means the plan submitted to the Attorney General pursuant to section 19 of this act. "Health service corporation" means a health service corporation established pursuant to P.L.1985, c. 236 (C.17:48E-1 et seq.). "Material change in form" means any action or series of actions that effect a fundamental corporate change which involves a transfer of ownership or control of assets of the health service corporation or a change of the mission or purpose of the health service corporation, including, without limitation, the purchase, lease, exchange, conversion, restructuring, merger, division, consolidation or transfer of control, bulk reinsurance or other disposition or transfer of a substantial amount of business, line of business, assets or operations of the health service corporation, including the transfer, directly or indirectly, of a substantial amount of the health service corporation's business, line of business, assets or operations to one or more nonconforming affiliates. A material change in form by the transfer, directly or indirectly, of a substantial amount of the health service corporation's business, line of business, assets or operations to one or more nonconforming affiliates shall not be deemed to occur so long as, during the most recent four prior consecutive calendar quarters: (1) the aggregate revenues of all nonconforming affiliates do not exceed 50 percent of the aggregate revenues for the health service corporation and all affiliates; (2) the aggregate revenues of all nonconforming affiliates derived from providing individual or group health coverage to residents of New Jersey equal or exceed 50 percent of the aggregate revenues from all nonconforming affiliates; and (3) the aggregate assets of all nonconforming affiliates do not exceed 50 percent of the aggregate assets of the health service corporation and all affiliates. Notwithstanding the above, a reorganization approved by the commissioner pursuant to section 5 of P.L.2020, c.145 (C.17:48E-46.5), whereby the mutual holding company is a charitable and benevolent institution as provided in section 41 of P.L.1985, c.236 (C.17:48E-41), shall not constitute a material change in form for purposes of P.L.2001, c.131 (C.17:48E-49 et seq.). "Nonconforming affiliate" means any affiliate of a health service corporation that: (1) operates on a for-profit basis, or (2) operates on a nonprofit basis and does not have a purpose the same as or substantially similar to that of the health service corporation. "Parent corporation" means a stock corporation incorporated under the laws of this State that is or has been organized for the purpose of acquiring, directly or indirectly, control of the converted insurer pursuant to the plan of conversion. "Petition" means the petition for approval of a foundation plan submitted to the Attorney General pursuant to subsection a. of section 19 of this act. "Plan of conversion" means the written plan of conversion adopted by the health service corporation in compliance with section 2 of this act. "Policy" means an individual or group policy or contract of insurance, including, without limitation, any certificate, rider, endorsement, plan or product offering issued by or binding upon the health service corporation. "Subscriber" means a person covered by or entitled to benefits under any policy, including, but not limited to, the persons described in subsection k. of section 1 of P.L.1985, c.236 (C.17:48E-1). L.2001, c.131, s.1; amended 2020, c.145, s.17.