S T A T E O F N E W Y O R K
________________________________________________________________________
7018
2009-2010 Regular Sessions
I N A S S E M B L Y
March 18, 2009
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Introduced by M. of A. GOTTFRIED, PAULIN, COOK -- Multi-Sponsored by --
M. of A. DINOWITZ, GALEF, LAVINE, MAISEL -- read once and referred to
the Committee on Insurance
AN ACT to amend the insurance law, in relation to conversion of medical
or dental expense indemnity corporations or health or hospital service
corporations into a corporation organized for pecuniary profit
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The insurance law is amended by adding a new section 7318
to read as follows:
S 7318. CONVERSION OF CERTAIN ARTICLE FORTY-THREE CORPORATIONS AND
HEALTH MAINTENANCE ORGANIZATIONS. (A) (1) THIS SECTION SHALL APPLY TO
ARTICLE FORTY-THREE CORPORATIONS NOT SUBJECT TO SECTION SEVEN THOUSAND
THREE HUNDRED SEVENTEEN OF THIS ARTICLE AND HEALTH MAINTENANCE ORGANIZA-
TIONS DOING BUSINESS AS NOT-FOR-PROFIT ORGANIZATIONS.
(2) FOR THE PURPOSES OF THIS SECTION:
(A) "APPLICANT" SHALL MEAN A CORPORATION OR OTHER ENTITY ORGANIZED
PURSUANT TO THIS ARTICLE OR A NOT-FOR-PROFIT ORGANIZATION CERTIFIED
PURSUANT TO ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH LAW AND WHICH SEEKS
TO CONVERT INTO A CORPORATION OR OTHER ENTITY ORGANIZED FOR PECUNIARY
PROFIT OR INTO A FOR-PROFIT ORGANIZATION OF ANY KIND.
(B) "CONVERT" OR "CONVERSION" SHALL MEAN ANY TRANSACTION THE EFFECT OF
WHICH IS TO CHANGE THE STATUS, ORIENTATION OR OPERATION OF THE APPLICANT
FROM A NOT-FOR-PROFIT ORGANIZATION TO A FOR-PROFIT ORGANIZATION, INCLUD-
ING WITHOUT LIMITATION:
(I) ANY SALE, LEASE, TRANSFER, EXCHANGE, OPTION, CONVEYANCE, GIFT,
JOINT VENTURE, MERGER, CONSOLIDATION OR DISPOSITION OR SERIES OF DISPO-
SITIONS OVER A PERIOD UP TO FIVE YEARS; OR
(II) ANY TRANSFER OF CONTROL, RESPONSIBILITY OR GOVERNANCE OR SERIES
OF SUCH TRANSFERS OVER A PERIOD OF UP TO FIVE YEARS.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06377-01-9
A. 7018 2
(C) "CHARITABLE ASSET" SHALL MEAN THE FAIR MARKET VALUE OF THE APPLI-
CANT OR PORTION THEREOF INVOLVED IN THE CONVERSION.
(3) ANY APPLICANT SHALL, NO LESS THAN ONE HUNDRED FIFTY DAYS BEFORE
PRESENTING A PETITION FOR CONVERSION TO THE SUPREME COURT, SUBMIT AN
APPLICATION TO THE ATTORNEY GENERAL. THE APPLICANT SHALL PRESENT SUCH A
PETITION TO THE SUPREME COURT IN ACCORDANCE WITH THE PROCEDURES IN PARA-
GRAPHS (A), (B) AND (C) OF SECTION FIVE HUNDRED ELEVEN OF THE
NOT-FOR-PROFIT CORPORATION LAW. IF THE CONVERSION INVOLVES A TRANSFER OR
DISPOSITION SUBJECT TO SECTIONS FIVE HUNDRED TEN AND FIVE HUNDRED ELEVEN
OF THE NOT-FOR-PROFIT CORPORATION LAW, A MERGER OR CONSOLIDATION PURSU-
ANT TO ARTICLE NINE OF THE NOT-FOR-PROFIT CORPORATION LAW, AN AMENDMENT
PURSUANT TO ARTICLE EIGHT OF THE NOT-FOR-PROFIT CORPORATION LAW OR A
DISSOLUTION PURSUANT TO ARTICLE TEN OF THE NOT-FOR-PROFIT CORPORATION
LAW, THE APPLICANT SHALL ALSO COMPLY WITH ALL APPLICABLE REQUIREMENTS OF
SUCH LAW. SUCH APPLICATION SHALL INCLUDE, BUT NOT BE LIMITED TO:
(A) THE BOARD OF DIRECTORS RESOLUTION REQUIRED BY SECTION FIVE HUNDRED
TEN, EIGHT HUNDRED TWO, NINE HUNDRED TWO, NINE HUNDRED THREE, ONE THOU-
SAND ONE OR ONE THOUSAND TWO OF THE NOT-FOR-PROFIT CORPORATION LAW OR
COMPARABLE ACTION BY THE APPLICANT'S GOVERNING BODY;
(B) THE INFORMATION REQUIRED TO BE INCLUDED IN THE APPLICANT'S PETI-
TION TO THE SUPREME COURT;
(C) A STATEMENT OF THE BENEFITS THE APPLICANT PROVIDES TO THE PUBLIC
AND ITS SUBSCRIBERS, ENROLLEES AND BENEFICIARIES;
(D) AN ASSESSMENT OF THE IMPACT THAT THE PROPOSED CONVERSION MAY HAVE
ON HEALTH CARE ACCESS, SERVICES AND COVERAGE IN THE AREA SERVED BY THE
APPLICANT; AND
(E) ALL OTHER SUCH INFORMATION WHICH THE ATTORNEY GENERAL DEEMS NECES-
SARY.
THE ATTORNEY GENERAL, AFTER CONSULTING WITH THE COMMISSIONER OF HEALTH
AND THE SUPERINTENDENT, MAY ADOPT SUCH REGULATIONS OR ESTABLISH SUCH
PROCEDURES NOT INCONSISTENT WITH THIS SUBSECTION AS THE ATTORNEY GENERAL
DEEMS NECESSARY OR PROPER TO IMPLEMENT THIS SUBSECTION. NO APPLICATION
SHALL BE DEEMED TO BE COMPLETE UNTIL THE ATTORNEY GENERAL HAS ACKNOWL-
EDGED, IN WRITING, THE RECEIPT OF A COMPLETE APPLICATION.
(4) UPON RECEIPT OF A COMPLETE APPLICATION, THE ATTORNEY GENERAL SHALL
PROVIDE NOTICE TO THE PUBLIC, THE COMMISSIONER OF HEALTH AND THE SUPER-
INTENDENT OF THE FILING OF THE APPLICATION, AND SHALL HAVE NO LESS THAN
ONE HUNDRED TWENTY DAYS TO APPROVE, DISAPPROVE OR CONDITIONALLY APPROVE
THE APPLICATION, PROVIDED, HOWEVER, THAT THE ATTORNEY GENERAL MAY EXTEND
SUCH TIME LIMIT FOR AN ADDITIONAL SIXTY DAYS UPON A SUBSTANTIAL AMEND-
MENT TO THE APPLICATION OR FOR OTHER GOOD CAUSE. IN UNDERTAKING A REVIEW
OF AN APPLICATION, THE ATTORNEY GENERAL SHALL BE AUTHORIZED TO HIRE
INDEPENDENT FINANCIAL, HEALTH, LEGAL AND OTHER EXPERTS AND CONSULTANTS,
THE REASONABLE AND NECESSARY COSTS OF WHICH SHALL BE THE RESPONSIBILITY
OF THE APPLICANT. PROMPTLY FOLLOWING CONSUMMATION OF THE CONVERSION, THE
SURVIVING FOR-PROFIT ORGANIZATION SHALL REIMBURSE THE CHARITABLE ENTITY
RECEIVING THE CHARITABLE ASSET FOR THE COSTS OF SUCH EXPERTS AND
CONSULTANTS, SUCH REIMBURSEMENTS TO BE MADE NOT LATER THAN THREE YEARS
AFTER THE SUPREME COURT'S ORDER AUTHORIZING THE APPLICANT'S PETITION TO
CONVERT BECOMES FINAL AND UNAPPEALABLE.
(5) WITHIN FORTY-FIVE DAYS AFTER THE ATTORNEY GENERAL DEEMS AN APPLI-
CATION COMPLETE, THE ATTORNEY GENERAL SHALL HOLD ONE OR MORE PUBLIC
HEARINGS ON THE APPLICATION WITHIN THE AREA SERVED BY THE APPLICANT. THE
NUMBER AND LOCATIONS OF THE HEARINGS SHALL BE SUFFICIENT TO ENSURE
ADEQUATE PUBLIC INVOLVEMENT AND COMMENT. IMMEDIATELY AFTER THE ATTORNEY
GENERAL DEEMS THE APPLICATION COMPLETE, THE APPLICANT SHALL PROVIDE
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NOTICE OF THE PUBLIC HEARINGS THROUGHOUT THE AREA AFFECTED BY THE APPLI-
CATION, BY DISTRIBUTING A FORM OR NOTICE APPROVED BY THE ATTORNEY GENER-
AL AND INCLUDING SUCH NOTICES IN THE STATE REGISTER, IN ACCORDANCE WITH
THE STATE ADMINISTRATIVE PROCEDURE ACT, IN NEWSPAPERS OF GENERAL CIRCU-
LATION AND ELECTRONIC NOTICES POSTED ON THE INTERNET. THE APPLICANT
SHALL NOTIFY POLICYHOLDERS, SUBSCRIBERS, ENROLLEES AND PROVIDERS OF
HEALTH CARE SERVICES UNDER CONTRACT WITH THE APPLICANT, IN WRITING, OF
THE APPLICATION AND HEARINGS. IN THE EVENT THAT THERE IS A MATERIAL
AMENDMENT TO THE APPLICATION, ADDITIONAL HEARINGS SHALL BE HELD WITH DUE
NOTICE PROVIDED. WITHIN FIVE DAYS OF RECEIPT OF A COMPLETE APPLICATION,
THE APPLICATION AND ANY SUPPORTING MATERIAL SUBMITTED TO THE ATTORNEY
GENERAL IN CONJUNCTION WITH THE APPLICATION SHALL BE DEEMED TO BE PUBLIC
RECORDS AND SHALL BE MADE AVAILABLE TO THE PUBLIC FOR INSPECTION DURING
NORMAL BUSINESS HOURS, AT NO COST, AT THE APPLICANT'S MAIN OFFICE WITHIN
THE STATE OF NEW YORK, AND AT THE OFFICE OF THE ATTORNEY GENERAL. ALSO
WITHIN FIVE DAYS OF THE APPLICANT'S RECEIPT OF THE ATTORNEY GENERAL'S
WRITTEN ACKNOWLEDGEMENT OF A RECEIPT OF A COMPLETE APPLICATION, THE
APPLICANT SHALL POST ITS APPLICATION AND ALL SUCH SUPPORTING MATERIAL
ELECTRONICALLY ON THE INTERNET. THE ATTORNEY GENERAL SHALL CAUSE A TRAN-
SCRIPT TO BE MADE OF EACH PUBLIC HEARING AND SUCH TRANSCRIPT AND ANY
SUBMITTED WRITTEN COMMENTS SHALL BE PUBLIC RECORDS. THE COMMISSIONER OF
HEALTH AND THE SUPERINTENDENT SHALL PROMPTLY PROVIDE THE ATTORNEY GENER-
AL WITH THE TRANSCRIPT OF ANY OTHER PUBLIC HEARINGS THEY HOLD OR WRITTEN
COMMENTS THEY RECEIVE WITH RESPECT TO THE PROPOSED CONVERSION, AND ANY
SUCH TRANSCRIPT AND COMMENTS SHALL BE PUBLIC RECORDS.
(6) THE ATTORNEY GENERAL SHALL NOT APPROVE AN APPLICATION UNLESS HE OR
SHE DETERMINES THAT:
(A) THE CHARITABLE ASSET IS BEING TRANSFERRED TO A CHARITABLE ORGAN-
IZATION THAT SATISFIES THE CRITERIA OF THIS SUBSECTION, AND THE CHARITA-
BLE ASSET SHALL BE IRREVOCABLY DEDICATED TO CHARITABLE HEALTH PURPOSES;
(B) THE RECIPIENT OF THE CHARITABLE ASSET IS EITHER AN EXISTING OR NEW
TAX-EXEMPT CHARITABLE ORGANIZATION OPERATING PURSUANT TO 26 U.S.C.A.
SEC. 501(C)(3) OR 501(C)(4) OF THE FEDERAL INTERNAL REVENUE CODE, AS
AMENDED OR ANY COMPARABLE PROVISION OF ANY SUCCESSOR LAW. IN EITHER
INSTANCE, WHETHER OR NOT THE CHARITABLE ORGANIZATION IS CLASSIFIED AS A
PRIVATE FOUNDATION UNDER SECTION 509 OF THE INTERNAL REVENUE CODE, AS
AMENDED OR ANY COMPARABLE PROVISION OF ANY SUCCESSOR LAW, IT SHALL BE
SUBJECT TO THE RESTRICTIONS AND LIMITATIONS THAT APPLY TO PRIVATE FOUN-
DATIONS IN SECTIONS 4941 THROUGH 4945 OF THE INTERNAL REVENUE CODE, AS
AMENDED OR ANY COMPARABLE PROVISION OF ANY SUCCESSOR LAW;
(C) THE ASSETS, PROCEEDS OR OTHER VALUE BEING CONVEYED TO SUCH CHARI-
TABLE ORGANIZATION ARE AT LEAST EQUAL TO THE FAIR MARKET VALUE OF THE
APPLICANT, OR THE PORTION OF THE APPLICANT INVOLVED IN THE CONVERSION,
BASED ON AN INDEPENDENT VALUATION OF THE CHARITABLE ASSET. FAIR MARKET
VALUE WILL BE DETERMINED AS OF THE TIME OF CONVERSION AND SHALL TAKE
INTO ACCOUNT ALL RELEVANT CONSIDERATIONS, INCLUDING, BUT NOT LIMITED TO,
MARKET VALUE, INVESTMENT OR EARNINGS VALUE, NET ASSET VALUE, A CONTROL
PREMIUM, THE VALUE OF ANY LICENSES THAT MAY BE TRANSFERRED TO THE
SUCCESSOR CORPORATION BY THE APPLICANT AND THE ECONOMIC IMPACT OF THE
CONVERSION ON THIS STATE RELATED TO THE TRANSFER OF THE FAIR MARKET
VALUE. THE ATTORNEY GENERAL MAY PERMIT ALL OR A PORTION OF THE CONSIDER-
ATION CONVEYED TO THE CHARITABLE ORGANIZATION TO CONSIST OF EQUITY IN
THE FOR-PROFIT ORGANIZATION THAT IS THE SURVIVOR OF THE CONVERSION,
PROVIDED THAT ANY CONSTRAINTS ON THE VOTING OR TRANSFERABILITY OF SUCH
EQUITY SHALL BE CONSIDERED IN DETERMINING WHETHER FAIR MARKET VALUE OF
THE CHARITABLE ASSET IS BEING TRANSFERRED TO THE CHARITABLE ORGANIZA-
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TION. THE APPLICANT SHALL SUBMIT AN INDEPENDENT VALUATION WITH ITS
APPLICATION. THE ATTORNEY GENERAL MAY REQUIRE THE APPLICANT TO SUBMIT
ADDITIONAL VALUATIONS OR APPRAISALS. THE ATTORNEY GENERAL SHALL UTILIZE
INDEPENDENT FINANCIAL EXPERTS OR CONSULTANTS TO REVIEW THE APPLICANT'S
VALUATION OR APPRAISAL AND, IF THE ATTORNEY GENERAL DEEMS APPROPRIATE,
TO CONDUCT ONE OR MORE SEPARATE INDEPENDENT VALUATIONS;
(D) THE FAIR MARKET VALUE OF THE APPLICANT HAS NOT AND IS NOT BEING
MANIPULATED, OR OTHERWISE ALTERED IN CONNECTION WITH THE PROPOSED
CONVERSION, IN ANY MANNER THAT CAUSES THE CHARITABLE ASSET TO DECREASE
OR BE UNDERVALUED;
(E) THE CONVERSION WILL NOT RESULT IN INUREMENT TO ANY PRIVATE PERSON
OR ENTITY, INCLUDING STOCK OPTIONS, AGREEMENTS NOT TO COMPETE, AND OTHER
PRIVATE BENEFITS;
(F) THE APPLICANT USED DUE DILIGENCE, SOUGHT AND CONSIDERED ALTERNA-
TIVE TRANSACTIONS, AND PERFORMED REASONABLE CHARACTER AND COMPETENCE
REVIEW, AND OTHERWISE FULFILLED ITS FIDUCIARY OBLIGATIONS OF DUE CARE,
LOYALTY AND OBEDIENCE TO THE APPLICANT, IN SELECTING THE SUCCESSOR ENTI-
TY OR PERSONS INVOLVED IN THE CONVERSION, IN NEGOTIATING THE TERMS AND
CONDITIONS OF THE CONVERSION, AND IN DECIDING TO CONVERT IN ACCORDANCE
WITH THE TERMS OF THE APPLICATION;
(G) THE CHARITABLE ORGANIZATION RECEIVING THE CHARITABLE ASSETS, ITS
DIRECTORS, OFFICERS AND STAFF SHALL BE AND WILL REMAIN INDEPENDENT OF
ANY CONTROL OR INFLUENCE BY THE SURVIVING FOR-PROFIT ORGANIZATION AND
ITS AFFILIATES AND SUCCESSORS. SUCH REQUIREMENT SHALL NOT PREVENT THE
CHARITABLE ORGANIZATION FROM VOTING ITS EQUITY SHARES IN THE FOR-PROFIT
ORGANIZATION TO ELECT DESIGNEES TO THE BOARD OF DIRECTORS OF THE
FOR-PROFIT ORGANIZATION. NO PERSON WHO IS AN OFFICER, DIRECTOR OR STAFF
MEMBER OF THE APPLICANT AT THE TIME THE APPLICATION IS SUBMITTED TO THE
ATTORNEY GENERAL, OR THEREAFTER SHALL BE AN OFFICER, DIRECTOR OR STAFF
MEMBER OF THE CHARITABLE ORGANIZATION RECEIVING THE CHARITABLE ASSET. NO
DIRECTOR, OFFICER, AGENT OR EMPLOYEE OF THE APPLICANT OR THE CHARITABLE
ORGANIZATION RECEIVING THE CHARITABLE ASSET WILL BENEFIT DIRECTLY OR
INDIRECTLY FROM THE CONVERSION OR TRANSACTIONS CONTEMPLATED THEREBY;
(H) THE CHARITABLE ORGANIZATION RECEIVING THE CHARITABLE ASSETS WILL
ESTABLISH FORMAL MECHANISMS TO AVOID CONFLICTS OF INTEREST AND TO
PROHIBIT GRANTS BENEFITING THE SURVIVING FOR-PROFIT ORGANIZATION, OR ITS
AFFILIATES OR SUCCESSORS, DIRECTORS, MANAGEMENT AND STAFF;
(I) THE MISSION OF THE CHARITABLE ORGANIZATION RECEIVING THE CHARITA-
BLE ASSET SHALL INCLUDE:
(I) EXPANSION OF ACCESS TO HEALTH CARE BY EXTENDING HEALTH INSURANCE
COVERAGE TO STATE RESIDENTS WHO CANNOT AFFORD TO PURCHASE THEIR OWN
COVERAGE OR WHO HAVE COVERAGE THAT IS INADEQUATE TO MEET THEIR NEEDS;
(II) EXPANSION AND ENHANCEMENT OF ACCESS TO HEALTH CARE BY AUGMENTING
AND CREATING HEALTH CARE PROGRAMS THAT DELIVER SERVICES TO POPULATIONS
THAT ARE UNABLE TO ACCESS HEALTH CARE SOLELY THROUGH EXPANDED HEALTH
INSURANCE COVERAGE; AND
(III) AUGMENTATION OF ITS OTHER PROGRAM PRIORITIES BY SUPPORTING
PROGRAMS THAT INFORM AND EDUCATE NEW YORKERS ABOUT PUBLIC HEALTH ISSUES
AND EMPOWER COMMUNITIES TO ADDRESS THESE ISSUES BY BECOMING MORE EFFEC-
TIVE AT IDENTIFYING AND ARTICULATING HEALTH CARE NEEDS AND IMPLEMENTING
SOLUTIONS.
PROGRAMS OR INITIATIVES INSTITUTED BY THE CHARITABLE ORGANIZATION
SHALL NOT NEGLECT THE RESIDENTS OR INSTITUTIONS SERVED BY THE APPLICANT
PRIOR TO THE CONVERSION;
(J) THE APPLICANT HAS CONSULTED WITH SUBSCRIBERS, INSTITUTIONS, HEALTH
CARE PROVIDERS AND COMMUNITY LEADERS IN THE SERVICE AREA AND HAS
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RETAINED AN INDEPENDENT CONSULTANT TO MAKE RECOMMENDATIONS FOR APPOINT-
MENTS TO THE BOARD OF DIRECTORS OF THE CHARITABLE ORGANIZATION RECEIVING
THE CHARITABLE ASSET. THE APPLICANT SHALL SUBMIT ITS PROPOSED NOMINEES
TO THE BOARD AND TO THE ATTORNEY GENERAL PRIOR TO THEIR APPOINTMENT, AND
THE ATTORNEY GENERAL SHALL NOT APPROVE SUCH NOMINEES UNLESS HE OR SHE
FINDS THAT THE BOARD IS BROADLY REPRESENTATIVE OF THE COMMUNITY AND
INCLUDES REPRESENTATIVES OF CONSUMER AND PUBLIC INTEREST ORGANIZATIONS
AND INDIVIDUALS WITH EXPERTISE IN PUBLIC HEALTH, HEALTH CARE DELIVERY
AND FINANCING, CONSUMER HEALTH ISSUES, INVESTMENTS AND PHILANTHROPIC
ADMINISTRATION. THE ATTORNEY GENERAL SHALL ALSO FIND THAT THE CHARITA-
BLE ORGANIZATION'S STRUCTURE PROVIDES MECHANISMS FOR ONGOING COMMUNITY
CONSULTATION AND ENGAGEMENT INCLUDING, BUT NOT LIMITED TO, THE ESTAB-
LISHMENT OF A COMMUNITY ADVISORY BOARD;
(K) THE CHARITABLE ORGANIZATION RECEIVING THE CHARITABLE ASSETS AGREES
IN WRITING TO REGISTER AND FILE ANNUAL FINANCIAL REPORTS WITH THE ATTOR-
NEY GENERAL IN COMPLIANCE WITH SECTION 8-1.4 OF THE ESTATES, POWERS, AND
TRUSTS LAW AND TO POST ITS REGISTRATION FILING AND ANNUAL REPORTS ELEC-
TRONICALLY ON THE INTERNET; AND
(L) A FOR-PROFIT HEALTH PLAN OR PLANS HAVE A SIGNIFICANT MARKET SHARE
IN THE GEOGRAPHIC AREAS SERVED BY THE APPLICANT.
(7) THE SUPERINTENDENT, WITHIN NINETY DAYS AFTER THE DATE THE ATTORNEY
GENERAL PROVIDES NOTICE TO HIM OR HER OF THE APPLICATION, SHALL ADVISE
THE APPLICANT AND THE ATTORNEY GENERAL IN WRITING WHETHER THE SUPER-
INTENDENT APPROVES, DISAPPROVES OR CONDITIONALLY APPROVES THE APPLICA-
TION AND THE REASONS FOR HIS OR HER DECISION. IN MAKING HIS OR HER DECI-
SION, THE SUPERINTENDENT SHALL DETERMINE WHETHER THE APPLICATION IS IN
THE BEST INTEREST OF POLICYHOLDERS, SUBSCRIBERS AND ENROLLEES AND
COMPLIES WITH ALL APPLICABLE PROVISIONS OF THIS CHAPTER AND REGULATIONS
THEREUNDER, AND WHETHER FOLLOWING THE CONVERSION, THE FOR-PROFIT ORGAN-
IZATION'S SUCCESSOR WILL HAVE SUFFICIENT CAPITAL AND RESERVES TO MEET
ITS OBLIGATIONS TO SUBSCRIBERS, POLICYHOLDERS, ENROLLEES AND HEALTH CARE
PROVIDERS.
(8) AN APPLICANT SHALL NOT SUBMIT ITS PETITION TO THE SUPREME COURT
UNTIL IT RECEIVES NOTICE FROM THE SUPERINTENDENT AND THE ATTORNEY GENER-
AL OF THEIR DETERMINATIONS PURSUANT TO THIS SUBSECTION OR UNTIL THE TIME
FOR THEIR MAKING SUCH DETERMINATIONS HAS CONCLUDED. THE APPLICANT SHALL
ATTACH THE DETERMINATIONS OF THE SUPERINTENDENT TO ITS PETITION, AND
SERVE THE SUPERINTENDENT WITH NOTICE OF THE COURT SUBMISSION IN THE SAME
MANNER AND WITHIN THE SAME TIME LIMIT THAT NOTICE IS TO BE GIVEN TO THE
ATTORNEY GENERAL. WITHIN TWENTY DAYS FOLLOWING NOTIFICATION OF A PETI-
TION TO THE SUPREME COURT BY AN APPLICANT PURSUANT TO AND IN ACCORDANCE
WITH THE PROCEDURE SET FORTH IN PARAGRAPH (B) OF SECTION FIVE HUNDRED
ELEVEN OF THE NOT-FOR-PROFIT CORPORATION LAW, THE ATTORNEY GENERAL SHALL
ADVISE THE COURT IN WRITING AS TO WHETHER THE PETITION SHOULD BE
APPROVED, DISAPPROVED OR CONDITIONALLY APPROVED, AND THE REASONS FOR
SUCH RECOMMENDATION AND SHALL MAKE EACH RECOMMENDATION AVAILABLE TO THE
PUBLIC.
(9) IN THE CASE OF A COURT HEARING ON A PETITION FOR CONVERSION
SUBMITTED PURSUANT TO THIS SUBSECTION AND/OR SECTIONS FIVE HUNDRED TEN
AND FIVE HUNDRED ELEVEN, ARTICLE EIGHT, NINE AND/OR TEN OF THE NOT-FOR-
PROFIT CORPORATION LAW, ANY SUBSCRIBERS, ENROLLEES, POLICYHOLDERS OR
BENEFICIARIES OF THE APPLICANT OR THEIR DESIGNEES MAY ALSO APPEAR AT THE
HEARING AND SHOW CAUSE WHY THE APPLICATION SHOULD OR SHOULD NOT BE
GRANTED.
(10) IF IT SHALL APPEAR TO THE SATISFACTION OF THE COURT THAT THE
CONSIDERATION AND THE TERMS OF THE CONVERSION ARE FAIR AND REASONABLE TO
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THE CHARITABLE ORGANIZATION THAT IS RECEIVING THE CHARITABLE ASSET, THAT
THE CHARITABLE PURPOSES OF THE APPLICANT WILL BE PROMOTED, THAT THE
CONVERSION IS CONSISTENT WITH THE FIDUCIARY OBLIGATIONS OF THE APPLI-
CANT'S DIRECTORS AND OFFICERS, AND THAT THE TERMS AND CONDITIONS OF THE
CONVERSION TRANSACTION AND ANY TRANSACTIONS CONTEMPLATED THEREBY ARE IN
THE BEST INTERESTS OF THE RESIDENTS OF THE STATE OF NEW YORK AND THE
APPLICANT'S POLICYHOLDERS, SUBSCRIBERS, ENROLLEES, AND BENEFICIARIES, IT
MAY AUTHORIZE THE PROPOSED CONVERSION FOR SUCH CONSIDERATION AND UPON
SUCH TERMS AS THE COURT MAY PRESCRIBE. IN THE EVENT THE SUPREME COURT
MAKES AN AUTHORIZATION PURSUANT TO THIS SUBSECTION, THE CHARITABLE
ORGANIZATION CREATED PURSUANT TO THE CONVERSION OR RECEIVING THE CHARI-
TABLE ASSET SHALL BE SUBJECT TO THE APPLICABLE PROVISIONS OF THE COURT
ORDER AUTHORIZING THE CONVERSION.
(B) IN THE EVENT THAT THE PROVISIONS OF THIS SECTION CONFLICT WITH THE
PROVISIONS OF THE NOT-FOR-PROFIT CORPORATION LAW, THEN THE PROVISIONS OF
THIS SUBSECTION SHALL PREVAIL.
S 2. This act shall take effect immediately.