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The Regulators Perspective
Responsibility for conversion transactions typically is not vested in one agency or public official. Various officials like the Insurance Commissioner (insurance issues) or the Attorney General (charitable and antitrust issues) have responsibilities for certain aspects of a conversion. As a result, there can be gaps in oversight and a lack of coordination regarding regulatory review, particularly when it comes to protecting health services. Unfortunately, regulatory involvement has been patchwork, particularly in states where there is no conversion statute in place to standardize the process under which conversions can take place.
A number of other regulatory agencies may have responsibility over the business of nonprofit corporations. For health plans and insurers, the Insurance Commissioner often has authority to protect policyholders and subscribers. For hospitals, local and/or state Commissioners of Health have authority to monitor the provision of health services, ensuring that they meet government standards for health and safety. Together the public, consumer leaders, and regulators can work to preserve and maintain scarce charitable health assets.
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