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Colorado Health Insurance Cooperative

On January 4, 2016, an Expedited Order of Liquidation and Finding of Insolvency for Colorado Health Insurance Cooperative (CHIC) was approved by the Denver County District Court. The Commissioner of Insurance for the State of Colorado was appointed as the Liquidator of CHIC.

On October 18, 2019, the United States Court of Federal Claims entered judgment in favor of the Colorado HealthOp in the amount of $24,489,799 in a case brought against the federal government for offsets claimed against reinsurance amounts due to the Colorado HealthOp. The federal government has appealed this judgment.

On November 22, 2019, the Denver Colorado District Court approved the sale of the Colorado HealthOp's ACA risk corridor receivable to Juris Capital. The sale calls for a $20 million upfront, non-recourse payment and a formulaic shared recovery based on the outcome of the litigation. The $20 million upfront, non-recourse payment was received on November 29, 2019.


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Colorado Health Insurance Cooperative in Liquidation - Responses to RFP Questions

  1. On page 3 of the RFP, the 2015 Risk Corridor amount due to Colorado HealthOp is listed as $96,472,522 as of the date of the RFP. However, the spreadsheet in the diligence materials (Diligence Item I) indicates this amount is $98,695,367 which is consistent with the amounts listed in CMS's publication (Diligence Item III). What is the source of this discrepancy? The amount in the RFP was an estimate provided by the Company. The amount on the spreadsheet ties to the CMS publication. Has the claim been reduced between December 30, 2017 and the date of the RFP? No.
  2. The spreadsheet (Diligence Item I) states that HealthOp's startup loan from CMS was converted to a surplus note. We didn't find any amendments to the loan agreements (diligence item VI) to implement such conversion. Can you please provide us with the appropriate amendment agreement that implemented the conversion of the startup loan to a surplus note? Second amendment provided separately.
  3. Can you please provide a copy of the proof of claim filed by CMS in the HealthOp liquidation? The CMS POC will be provided and must be maintained in accordance with the non-disclosure agreement.
  4. Can you please provide any correspondence with CMS related to CMS's assertions of setoff against HealthOp? The set-offs are part of the proof of claim submitted by CMS.
  5. Section VII of the RFP describes the two preferred bid structures. For alternative B, involving a combination of an upfront payment and split of future recoveries, there is obviously a tradeoff between the upfront amount and the share of future recoveries retained by HealthOp. Does the liquidator have any specific preferences that constrain these tradeoffs (e.g. a minimum upfront dollar amount or a minimum retained share of future recoveries)? The Liquidator will consider all bids and chooses not to comment on a specific preference other than the Section VII. Preferred Bids.