Outline of Holding Company Analysis Framework

Health Financial Analysis Handbook – Annual 2012 / Quarterly 2013 V. Supplemental Procedures – I. Form E or Other Required Information

Special Notes:

The following procedures do not supercede state regulation, but are merely additional guidance an analyst may consider useful. The following procedures are intended only for the review of compliance with filing requirements and are not specific to the decision process for approval of a transaction.

Form E (or Other Required Information) – Pre-Acquisition Notification Form Regarding the Potential Competitive Impact of a Proposed Merger or Acquisition by a Non-Domiciliary Insurer Doing Business in This State or by a Domestic Insurer

Form E or other required information is transaction specific and is not part of the regular annual/quarterly analysis process. The review of these transactions may vary, as some states may have regulations that differ from Form E. Also note that as state requirements for Form E vary, in many states, the Form E or other required information is filed to the non-domestic regulator.

Certain procedures include the 2010 revisions to the Insurance Holding Company System Regulatory Act and Insurance Holding Company System Model Regulation with Reporting Forms and Instructions. For states that have not adopted these revisions, the requirements of your own state’s laws and regulations should be applied when reviewing Form E or other required procedures. Changes related to the 2010 revisions are highlighted gray in the text below.

Form E (or Other Required Information) – Pre-Acquisition Notification Form Regarding the Potential Competitive Impact of a Proposed Merger or Acquisition by a Non-Domiciliary Insurer Doing Business in This State or by a Domestic Insurer

Form E, or other required information, is transaction specific and is not part of the regular annual/quarterly analysis process. The review of these transactions may vary, as some states may have regulations that differ from Form E.

1. Does Form E, or other required information, state the names and addresses of the persons who are providing notice of their involvement in a pending acquisition or change in corporate control?

2. Does Form E, or other required information, contain the following information:

 State the names and addresses of the persons affiliated with the persons listed in question 1

 Describe their affiliations

3. Does Form E, or other required information, state the nature and purpose of the proposed merger or acquisition?

4. Does Form E, or other required information, state the nature of the business performed by each of the persons listed in questions 1 and 2?

5. Does Form E, or other required information, provide the following information:

 State the market and market share in each relevant insurance market the persons identified in questions 1 and 2 currently benefit from in this state

 Historical market and market share data for each person identified in questions 1 and 2 for the past five years

 Provide a determination as to whether the proposed acquisition or merger, if consummated, would violate the competitive standards of the state. If the proposed merger or acquisition would violate competitive standards, provide justification of why the acquisition or merger would not substantially lessen competition or create a monopoly in the state

 The sources of the above information

Assessment of Form E or Other Required Information

6. If the Form E, or other required information, identifies certain thresholds that are exceeded, indicating evidence of the transaction’s violation of the competitive standards within the state, has the applicant provided appropriate information or arguments that support the transaction does not violate the competitive standard? If no, explain.

7. In the department’s review of the Form E or other required information, did the department note any concerns or risks regarding the impact of the proposed merger or acquisition on the market share or competition within the state? Explain.

Summary and Conclusion Develop and document an overall summary and conclusion regarding the holding company Form E or other required information. In developing a conclusion, the analyst should consider the above procedures, as well as any other procedures which, in the analyst’s judgment, are relevant to evaluating holding company Form E, or other required information, under the specific circumstances involved.

Recommendations for further action, if any, based on the overall conclusion above:

 Contact the health entity seeking explanations or additional information

 Obtain the health entity’s business plan  Require additional interim reporting from the health entity

 Meet with the health entity’s management

 Other (explain) Analyst ______Date______

Comments as a result of supervisory review. Reviewer ______Date______