§ 7317. Conversion of certain article 43 corporations. (a) (1) An\narticle forty-three corporation which was the subject of an initial\nopinion and decision issued by the superintendent on or before December\nthirty-first, nineteen hundred ninety-nine, as the same may be amended\nor one or more article forty-three corporations whose main offices on\nJanuary first, two thousand seven were located in one of the counties\nlisted in section one thousand two hundred sixty-two of the public\nauthorities law and its or their not-for-profit subsidiaries (including,\nwithout limitation, any such subsidiary licensed as a health service\ncorporation pursuant to this chapter or as a health maintenance\norganization organized pursuant to article forty-four of the public\nhealth law), hereinafter referred to in the singular, which seeks to\nconvert into one or more corporations or other entities organized for\npecuniary profit or into one or more for-profit organizations of any\nkind shall submit a proposed plan of conversion to the superintendent\nfor approval pursuant to this section.\n (2) This section shall apply to any transaction the effect of which is\nto change the status, orientation or operation of the applicant from a\nnot-for-profit organization to a for-profit organization, including:\n (A) Any sale, lease, transfer, exchange, option, conveyance, gift,\njoint venture, merger, consolidation or disposition of all or a material\nportion of the assets of the applicant over a period of five years;\n (B) Any transfer of control, responsibility or governance over all or\nsubstantially all of the assets of the applicant; or\n (C) Continuation of the corporate existence of the applicant by\nreconstituting the corporate form of the applicant from a not-for-profit\ncorporation to a business corporation by the filing of a restated\ncertificate of incorporation regardless of whether such changes occur in\none transaction or in a series of transactions.\n (b) The proposed plan of conversion shall include all items and\naddress all issues as may be required by the superintendent in order for\nthe superintendent to assure that the conversion process will not\nadversely affect the applicant's contractholders or members, will\nprotect the interests of and will not negatively impact on the delivery\nof health care benefits and services to the people of the state of New\nYork and results in the fair, equitable and convenient winding down of\nthe business and affairs of the applicant. The superintendent may adopt\nsuch rules or regulations or establish such procedures as he or she\ndeems necessary or proper to implement the provisions of this section.\n (c)(1) The proposed plan shall address the following items and issues,\nif applicable, to the satisfaction of the superintendent:\n (A) The transition of contract forms from the not-for-profit\ncorporation to the converted corporation or health maintenance\norganization including any related holding companies, subsidiaries or\nother entities involved in the proposed conversion;\n (B) Any transfer of assets agreements;\n (C) Any corporate resolutions or authorizations by the board of\ndirectors;\n (D) Any reinsurance arrangements;\n (E) An explanation of any transfers of employees, records and\nequipment;\n (F) Any management contracts or administrative service agreements;\n (G) Any guarantees or cross-guarantee agreements;\n (H) Any trust agreements;\n (I) That the applicant's financial reserves are funded prior to the\nconversion at the level required by law and provide a detailed\ndescription of the financial structure and reserve levels of the\nconverted corporation or organization;\n (J) The governance structure and the character and competence of\ndirectors and officers;\n (K) Any administrative agreements among related companies, including\nfair and equitable terms and reasonable fees;\n (L) A detailed description of any proposed public sale of stock or\nsecurities or any ini
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