12Requirements in relation to a merger or acquisition

12 Requirements in relation to a merger or acquisition

(1) The parties to an arrangement must submit to the Council with an application for approval of the arrangement: (a) a copy of the arrangement; (b) a business plan (the Business Plan) for each receiving fund covering the period of the first 36 months of operation from the transfer date including the following: (i) a statement of the liabilities incurred for the purposes of, and assets of, the fund at the transfer date; and (ii) a budget statement for the fund for each month of the period of the Business Plan, setting out in detail: (A) the projected income and expenditure for the fund; and; (B) the projected assets and liabilities at the end of each month; and (C) the projected solvency and capital adequacy position of the fund at the end of each month; and (iii) the ratio that the projected amount of the management and administrative expenses in respect of the conduct of the fund bears to the estimated amount of premiums paid to that fund; and (iv) summary of proposed changes, if any, to the insurer’s marketing plan including strategies and costs associated with the implementation of the arrangement and promotion of the fund; and (v) the estimated number of policy holders of the fund at the end of each month; and (vi) summary of any proposed changes to the insurer’s contractual procedures and arrangements with health service providers and other service providers; and (vii) summary of any proposed changes to benefits and premiums; and (c) for each receiving fund, a statement by an officer for the transferee insurer (the certification of compliance) confirming that the board, or other governing body, of the insurer has considered the arrangement and is of the view that the arrangement meets, and the operation of the receiving fund from the transfer date in accordance with the arrangement will meet, the requirements of: (i) the Act; and (ii) any Regulations; and (iii) the Rules; and (d) for each receiving fund, a report from the transferee insurer’s appointed actuary (the actuary’s report) which provides the opinion of the actuary: (i) that the aspects of the Business Plan which provide the information required in paragraph (b) are well‑founded; and (ii) that the assets and liabilities that would be transferred to the receiving fund or funds represent a reasonable estimate of what would be, immediately before the arrangement takes effect: (A) if there is one transferring fund—the net asset position of the transferring funds; and (B) if there is more than one transferring fund—the sum of the net asset positions of each of the funds; (iii) about how the arrangement will affect the ability of the insurer to comply with: (A) the solvency standard; and (B) the capital adequacy standard, in relation to each of the relevant funds of the insurer at each of the following times: (C) the transfer date; and (D) any time over the first 36 months after the transfer date; and (E) any time within the foreseeable future of operation of the funds beyond 36 months after the transfer date; and (iv) about what effects the arrangement is likely to have on the premiums for, and benefits under: (A) each policy group of the policies which are referable to the transferring fund immediately before the restructure; and (B) each policy group of the policies which are referable to a receiving fund immediately before the restructure, at each of the following times: (C) the transfer date; and (D) any time over the first 36 months after the transfer date; and (E) any time within the foreseeable future of operation of the funds beyond 36 months after the transfer date; and (e) for each transferring fund, a statement by an officer for the transferor insurer (the certification of compliance) confirming that the board, or other governing body, of the insurer has considered the arrangement and is of the view that the arrangement meets, and the operation of the receiving fund from the transfer date in accordance with the arrangement will meet, the requirements of: (i) the Act; and (ii) any Regulations; and (iii) the Rules; and (f) a report from the transferor insurer’s appointed actuary (the actuary’s report) which provides the opinion of the actuary: (i) that the assets and liabilities that would be transferred to the receiving fund or funds represent a reasonable estimate of what would be, immediately before the arrangement takes effect: (A) if there is one transferring fund—the net asset position of the transferring fund; and (B) if there is more than one transferring fund—the sum of the net asset positions of each of the funds; and (ii) that for each transferring fund to which subparagraph 146‑5(1)(b)(i) of the Act applies, the net asset position of the fund immediately after the arrangement takes effect will not be greater than zero; and (iii) about how the arrangement will affect the ability of the insurer to comply with: (A) the solvency standard; and (B) the capital adequacy standard, at each of the following times: (C) the transfer date; and (D) any time over the first 36 months after the transfer date; and (g) a copy of the statement, if any, issued by a party to the arrangement in accordance with subsection 93‑20(2) of the Act about any proposed change of the rules of the transferor private health insurer associated with the arrangement; and (h) a copy of any statement issued by a party to the arrangement in accordance with subsection 93‑20(4) about the aspect of the arrangement which involves the proposed change in funds to which policies are referable; and (i) a summary of any submissions in writing (including email or other electronic form) to a private health insurer party to the arrangement from a policy holder of a policy of a fund conducted by the insurer in relation to any aspect of the arrangement regardless of whether the submission was made in response to a statement issued under subsection 93‑20(2) or subsection 93‑20(4) of the Act or otherwise. (2) Prior to the transfer date, each party to the arrangement must, except to the extent provided for in the Act, procure any amendment of its constitution and any of its rules required for the arrangement to take place.