Press Release March 18, 2003 DISR Challenges MD Claim to Jurisdiction over DC's Blue Cross Plan (Washington, DC) - District of Columbia Insurance Commissioner Lawrence Mirel informed the Maryland Insurance Administration (MIA) of its need to respect the District’s authority over its Blue Cross/Blue Shield health insurance plan. In a letter to Maryland Insurance Commissioner Steven B. Larsen, Mirel warned that he would “take all actions necessary” to protect the subscribers of Group Hospitalization and Medical Services, Inc. (GHMSI), the District’s Blue Cross plan, in his role as “primary regulator of GHMSI”. Mirel was responding to language in the MIA Order, dated March 5, 2003, which disapproved the proposed conversion and sale of CareFirst, Inc. to the for-profit health insurer WellPoint Health Networks Inc.  The Order claims that Maryland has authority over GHMSI because the holding company, CareFirst, Inc., is Maryland-based. In addition, the Order states that Larsen may take into account the views of the DC Commissioner regarding the fate of GHMSI, but “he is not required to do so”. In his letter to Larsen, Commissioner Mirel wrote, “as you know, GHMSI is domiciled in the District of Columbia and is regulated here as a domestic hospital and medical services corporation.  Please be advised that I disagree with your conclusions regarding Maryland’s jurisdiction over GHMSI in this matter.” Mirel also responded to a bill now before the Maryland legislature that would change the corporate governing structure of CareFirst, Inc.  GHMSI entered into an agreement with CareFirst, Inc., which gives GHMSI a specific number of seats on CareFirst, Inc.’s board of directors.  In his letter Mirel said that any Maryland legislation that does not recognize GHMSI’s right to the agreed proportion of representation on the CareFirst, Inc. board, or which proposes to dictate any change in the way in which GHMSI is required to conduct its business, would be considered by him “to be a breach of the existing CareFirst, Inc. reorganization agreement and a usurpation by Maryland of the District of Columbia’s primary regulatory authority over GHMSI.”   Mirel noted that his letter does not take issue with Larsen’s disapproval of the conversion, but rather with his claim of jurisdiction over GHMSI, the District’s Blue Cross plan.  “Mr. Larsen is entitled to his view of the proposed conversion and sale of the CareFirst holding company,” Mirel said, “but he has no right to attempt to exercise regulatory authority over a health plan based in the District of Columbia.  Authority over that plan lies with the Government of the District of Columbia, and specifically with my Department and the Office of the Corporation Counsel.”  The DC Department of Insurance and Securities Regulation (DISR) has two missions, (1) to provide fair, efficient and fast regulatory supervision of the insurance and securities businesses for the protection of the people of the District of Columbia, and (2) to create conditions that will retain and attract national and international insurance and other financial businesses to the District.