State officials held a public hearing Thursday night in Miami for Florida Blue executives to explain their reasons for applying to reorganize from a nonprofit insurance company to a stock insurer under a nonprofit mutual holding company.
Company executives say the change would allow Florida Blue to issue stock and raise capital, as well as offer non-insurance products in retail stores without the burden of insurance regulations.
They also vowed that compensation for the company's top officers and directors would not increase as a result, and that only the holding company would own the stock -- though Florida Blue Chief Executive Pat Geraghty acknowledged that stock sale to third parties in the future could happen.
Florida Insurance Commissioner Kevin McCarty was among the state officials presiding at the hearing, and he asked Geraghty if there wasn't another way for the company to achieve its goal without reorganizing.
But critics questioned whether the reorganization, if approved, would allow new stockholders to benefit from Florida Blue’s significant surpluses generated from the rates paid by policyholders over the years — if that stock were sold to third-party investors.
State officials have not announced a date when they will rule on the proposal.
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