Volunteer State Health Plan, Inc. - TN.gov · STATEMENT ~~.s oF September 30, 2009 oF THE Volunteer State Health Plan, Inc. Notes to Financial Statement 14. Contingencies A. Contingent

11111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111 QUARTERLy STA TEMENTICcodenotentered) 2009 Doc~ntCode: 201

AS OF September 30, 2009 OF THE CONDITION AND AFFAIRS OF THE

Volunteer State Health Plan, Inc. NAIC Group Code 0000 0000 NAIC Company Code ____ _ Employe(s ID Number ___ 6.:..:.2'--1'""6-'-56'--'6-'-1 0'-----

(Current Period) (Prior Period)

Organized under the Laws of Tennessee State of Domicile or Port of Entry Tennessee

Country of Domicile United States of America

Licensed as business type: Life, Accident & Health[ ] Dental Service Corporation[ ] Other[]

Property/Casualty[ ] Hospital, Medical & Dental Service or Indemnity[ ] Vision Service Corporation[ ] Health Maintenance Organization[X] Is HMO Federally Qualified? Yes[ ] No(X) N/A( )

Incorporated/Organized 07/11/1996 Commenced Business _______ .;...11"-'/0:....:1.:...:/1c::.99::..:6:.__ _ ____ _

Statutory Home Office 1 Cameron Hill Circle Chattanooga,TN 37402 (Street and Number) (City, or Town, State and Zip Code)

Main Administrative Office 1 Cameron Hill Circle (Street and Number)

Chattanooga, TN 37402 (423)535-5600 (City or Town, State and Zip Code)

Mail Address 1 Cameron Hill Circle 1.3 (Street and Number or P.O. Box)

(Area Code) (Telephone Number)

---------::::cC:..:.h=att::::a::..:no::.:oga, TN 37402 (City, or Town, State and Zip Code)

Primary Location of Books and Records

Internet Web S~e Address

Chattanooga, TN 37402 (City, or Town, State and Zip Code)

www.vshptn.com

1 Cameron Hill Circle (Street and Number)

(423)535-5600 (Area Code) (Telephone Number)

Statutory Statement Contact _ _ ______ _ D_a_na"=E_Ia....,ine_ Hu"-11 ________ _ (Name)

(423)535-7919 -------,(A.,-re-a-=c,-od:-:e)-:::(T~hone Number)(Extension)

State of County of

Tennessee

Dana [email protected] (E-Mail Address)

OFFICERS Name

Steven Edward Kerr Sonya Kay Nelson Steven Lee Coulter MD Robert Stanley DeMerritt David Matthew Moroney MD Daniel Paul Timblin Alaine Marie Zachary Shelia Dian Clemons Katharine Anne Laurance Amber Jeanine Cambron

Title Vice President, Finance # President & CEO Managing Director Chief Financial Officer VP and Chief Medical Officer # Treasurer Assistant Treasurer Secretary Assistant Secretary Vice President, Operations #

Other Judy Messer Slagle, Interim Chief Operating Officer#

DIRECTORS OR TRUSTEES Vicky Brown Gregg, Chairman John Francis Giblin

Steven Lee Coulter MD

__ ..:..;H.=am.:.::i=lto::..:n __ ss

(423)535-8331 (Fax Number)

The officers of this reporting entity, being duly sworn, each depose and say that they are the described officers of the said reporting entity, and that on the reporting period stated above, all of the herein described assets were the absolute property of the said reporting entity, free and clear from any liens or claims thereon, except as herein stated, and that this statement, together with related exhibits, schedules and explanations therein contained, annexed or referred to, is a full and true statement of all the assets and liabilities and of the condition and affairs of the said reporting entity as of the reporting period stated above, and of its income and deductions therefrom for the period ended, and have been completed in accordance with the NAIC Annual Statement Instructions and Accounting Practices and Procedures manual except to the extent that: (1) state law may differ; or, (2) that state rules or regulations require differences in reporting not related to accounting practices and procedures, according to the best of their information, knowledge and belief, respectively. Furthermore, the scope of this attestation by the described office s also includes the related corresponding electronic filing with the NAIC, when required, that is an exact copy (except for formatting differences due to electronic filing) of the enclosed state ent. The electronic filing may be requested by various regulators in lieu of or in addition to the enclosed statement.

President & CEO (Title)

Subscribed and sworn to rfor.e me this c4J D day of __r>::. 6 , 2009. \ '0

01 ~, ~_,_/ (Notary Public S1gnature)

.Commission~ August 18, 2010

6~~~ (Signature)

Shelia Dian Clemons (Printed Name)

2. Secretary

(Title)

a. Is this an original filing? b. If no, 1. State the amendment number

~'''"11111;,11 2. Date filed ~'~~\ COL/.f:f~,~~mber of pages attached

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Chief Financial Officer (Title)

Yes[] No[X) 1

01/27/2010

STATEMENT ~~.s oF September 30, 2009 oF THE Volunteer State Health Plan, Inc.

Notes to Financial Statement

14. Contingencies

A. Contingent Commitments

In the first quarter of 2008, BCBST raised $200,000,000 in order to help finance the construction of BCBST's new headquarters in Chattanooga. The Industrial Development Board of the City of Chattanooga issued $200,000,000 of taxable variable rate demand revenue bonds on March 14, 2008 and made these funds available to BCBST pursuant to a lease agreement between the issuer and BCBST. The payment of principal and interest on the bonds is secured by an irrevocable, direct-pay letter of credit issued by Bank of America, NA ("BOA"). The bonds bear interest at a weekly variable rate established by the Remarketing Agent (BOA). Interest is payable monthly in arrears. The bonds are subject to optional redemption. There are no mandatory sinking fund redemptions prior to maturity. However, the bonds are subject to mandatory redemption upon certain events as described in the Official Statement. The letter of credit will expire on March 14, 2013, unless extended as provided in the Reimbursement Agreement. Under the Reimbursement Agreement, the Company made certain covenants to the Letter of Credit Bank customary for transactions of this type. Under the Reimbursement Agreement, the Company is considered a "material subsidiary" if the Company's revenues exceed 7.5% of consolidated revenue for BCBST and its subsidiaries. Should the Company become a "material subsidiary" under the Reimbursement Agreement, BOA may require the Company to guaranty the BCBST financing, subject to prior approval of the Tennessee Department of Insurance. As of September 30, 2009, the Company was a "material subsidiary", as defined in the Reimbursement Agreement, and the Company is currently in discussions with BOA about whether or not a guaranty by the Company of the BCBST financing would be required.

B. Assessments

The Company receives periodic liquidated damage assessments from the State of Tennessee, primarily related to operational performance targets.

C. The Company had no gain contingencies not recognized in the Company's financial statements.

D. Claims related extra contractual obligation and bad faith losses stemming from lawsuits

Various lawsuits against the Company have arisen in the course of the Company's business. Contingent liabilities arising from litigation, income taxes and other matters are not considered material in relation to the financial position of the Company.

E. The Company has no other contingencies to be reported as required by SSAP No. 5.

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