House Bill 346 Summary

• Establishes a procedure allowing hospital service corporations to reorganize by creating a nonprofit holding corporation that serves as the ultimate controlling person of the hospital service corporation.

• Reorganizations are treated as internal restructuring and not subject to change of control provisions, requiring only compliance with G.S. 58-19-30 and the new Part 3 for approval by the Commissioner.

• Hospital service corporations may transfer up to 25% of admitted assets (cash, investments, or equity interests in affiliates/subsidiaries) to the nonprofit holding corporation, excluding health insurance subsidiaries.

• Prohibits directors, officers, or employees from receiving compensation for aiding in the reorganization, and requires the nonprofit holding corporation's governing board to consist solely of individuals serving on the hospital service corporation's board.

• Subscribers' contracts and certificates issued by the hospital service corporation remain in full force and effect, and the reorganization does not change the hospital service corporation's legal form or business license in North Carolina.