April 8, 2002

The District of Columbia Releases Procedures for WellPoint/CareFirst Application

Washington, DC - The DC Department of Insurance and Securities Regulation (DISR) released a Preliminary Order and a Proposed Case Management Order in the pending application of WellPoint Health Network Inc. to acquire CareFirst, Inc. CareFirst is the parent organization of Group Hospitalization and Medical Services, Inc. (GHMSI), the District of Columbia’s Blue Cross/Blue Shield health provider. The Order affirms DISR’s jurisdiction and outlines specific procedures for reviewing and acting upon the application.

On January 11, 2002, WellPoint Health Network Inc. filed an application with DISR seeking the approval of the DC Commissioner of Insurance and Securities Regulation for the acquisition of GHMSI and its parent company, CareFirst Inc.  A necessary prerequisite to the sale is the conversion of GHMSI from a non-profit hospital and medical services corporation to a for-profit stock life insurance company.   The conversion will also have to be approved by the District of Columbia Office of the Corporation Counsel (OCC).

The Preliminary Order determines that the application submitted by WellPoint is incomplete and that a public hearing will best serve all interested parties once a responsive and complete application is submitted. The Order directs WellPoint to file a draft amended and restated application on or before July 16, 2002, and calls for two initial open public forums prior to that date in order to gather public comment on the pending application.

“We want to establish an orderly and timely process for investigation and review of the extensive legal, regulatory and public policy issues that this application presents,” said DC Insurance and Securities Commissioner Lawrence H. Mirel.  “Our office and the Office of the Corporation Counsel are committed to a fair, open and transparent procedure that will provide ample opportunity for public input,” Mirel said.

Click here for a copy of the Order and other public documents in this matter.

The DC Department of Insurance and Securities Regulation (DISR) has two missions, (1) to provide fair, efficient and fast regulatory supervision of the insurance and securities businesses for the protection of the people of the District of Columbia, and (2) to create conditions that will retain and attract national and international insurance and other financial businesses to the District.