Bright Health Watched Out in Tennessee
Bright Health Group may add Tennessee to a growing list of states concerned about its ability to meet its financial obligations.
Tennessee regulators took over the struggling health insurance company in November, according to Tennessee Department of Commerce and Insurance filings. Bright Health is prohibited from spending more than $10,000 at a time without Tennessee’s approval. The state also reserved the right to initiate legal proceedings, liquidation or late payment against the company.
This month, Bright Health said it needed to raise $300 million by the end of the year or risk closing. As of December 31, the company reported a $12.9 million deficit among its government-regulated subsidiaries.
Insurtech’s money problems have drawn negative attention in a number of states. Florida regulators have controlled the company since last year with the same spending restrictions as in Tennessee. The insurer also has operations in Alabama, Arizona, California, Colorado, Georgia, Illinois, New York, North Carolina, Ohio, South Carolina and Texas.
Under Tennessee’s executive order, Bright Health cannot transfer money from its parent company’s Tennessee subsidiary without permission. The state must also grant the company permission to transfer ownership, change management, or discontinue insurance products. Bright Health must reimburse Tennessee for any costs incurred in connection with the enforcement of the supervision order. As of December 31, Bright Health’s operations in Tennessee totaled $186 million, according to financial documents.
The Tennessee Department of Commerce and Insurance declined to release information about the printing of the oversight order, but believes it was in the public interest, the spokesman wrote in an email.
Bright Health Group did not immediately respond to a request for an interview.