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BULK REINSURANCE AGREEMENT, BILL OF SALE

AND ASSUMPTION OF LIABILITIES

THIS BULK REINSURANCE AGREEMENT, BILL OF SALE AND ASSUMPTION OF LIABILITIES (this "Agreement") is made and entered into as of the ___ day of ______________________, _____, by and between ASSOCIATED HOSPITAL SERVICE OF MAINE, a Maine non-profit corporation d/b/a BLUE CROSS AND BLUE SHIELD OF MAINE ("BCBS-ME"), and ANTHEM HEALTH PLANS OF MAINE, INC., a Maine corporation ("ABCBS-ME").

RECITALS

WHEREAS, BCBS-ME and Anthem Insurance Companies, Inc. ("Anthem") are parties to an Asset Purchase Agreement dated ___________, 1999 (the "Purchase Agreement"); and

WHEREAS, ABCBS-ME is the nominee and an indirect subsidiary of Anthem; and

WHEREAS, pursuant to the Purchase Agreement, BCBS-ME has agreed to sell the Assets and assign the Assumed Liabilities (as those terms are defined below) to ABCBS-ME, and ABCBS-ME has agreed to purchase the Assets and accept the Assumed Liabilities from BCBS-ME; and

WHEREAS, pursuant to 24.A M.R.S.A. Section 3484, BCBS-ME has filed a plan of dissolution with the Maine Superintendent of Insurance (the "Plan of Dissolution"), which Plan of Dissolution provides for the disposition by bulk reinsurance of all of BCBS-ME's insurance in force to ABCBS-ME and the full discharge by ABCBS-ME of all obligations therefor, all in accordance with 24.A M.R.S.A. Section 3483; and

WHEREAS, the transactions contemplated by the Purchase Agreement are being consummated on the date hereof, and this Agreement is required for the purpose of documenting the transfer of the Assets and the Assumed Liabilities, and the disposition by bulk reinsurance of all of BCBS-ME's insurance in force, to ABCBS-ME.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual benefits to be received by the respective parties hereto, and the mutual covenants, conveyances, grants, and agreements herein contained, to be kept and performed, BCBS-ME and ABCBS-ME covenant and agree, each with the other, as follows:

  1. DEFINITIONS
    1. Transferred Policies. The Transferred Policies are all of the insurance policies and health care benefit contracts issued under any health plan that is sponsored, underwritten or administered by BCBS-ME, which policies and contracts have been issued by BCBS-ME to its policyholders on or before, and are in effect on, the Transfer Date and are transferable under Maine law, as applicable.
    2. Transfer Date. The Transfer Date is the date hereof, which is the Closing Date of the Purchase Agreement.
    3. Other. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Purchase Agreement.
  2. ASSUMED LIABILITIES
    1. Assignment. Subject to the terms and conditions of this Agreement, effective as of the Transfer Date, BCBS-ME agrees to and does hereby convey, transfer and assign to ABCBS-ME, and ABCBS-ME agrees to and does hereby assume from BCBS-ME, the Assumed Liabilities. BCBS-ME agrees to execute such additional documents and instruments and take such additional actions as may be necessary or desirable to evidence or effectuate the foregoing assignment.
    2. Acceptance. Subject to the terms and conditions of this Agreement, effective as of the Transfer Date, ABCBS-ME does hereby accept the foregoing assignment, conveyance and transfer and agrees to perform, observe, and discharge all of the duties, obligations and undertakings of BCBS-ME under the Assumed Liabilities. ABCBS-ME agrees to execute such additional documents and instruments and take such additional actions as may be necessary or desirable to evidence or effectuate the acceptance and assumption of the foregoing assignment.
  3. ENTIRE INTEREST IN ASSETS
    1. Assignment. Effective as of the Transfer Date, BCBS-ME does hereby assign, convey and transfer to ABCBS-ME all right, title and interest of BCBS-ME in and to the Assets, to have and to hold the same subject to any and all obligations, liabilities, claims, liens, encumbrances, charges and duties, of whatever nature, of BCBS-ME (other than Excluded Liabilities). BCBS-ME agrees to execute such additional documents and instruments and take such additional actions as may be necessary or desirable to evidence or effectuate the foregoing assignment.
    2. Acceptance. Subject to the terms and conditions of this Agreement, effective as of the Transfer Date, ABCBS-ME does hereby accept the foregoing assignment, conveyance and transfer of the Assets and agrees to assume and to perform, observe, discharge and pay promptly when due, any and all obligations, liabilities, claims, liens, encumbrances or charges, of whatever nature, which may be attached to or arise out of the Assets, or which may arise and accrue from and after the Transfer Date (other than Excluded Liabilities). ABCBS-ME agrees to execute such additional documents and instruments and take such additional actions as may be necessary or desirable to evidence or effectuate the acceptance and assumption of the foregoing assignment.
    3. Power of Attorney. BCBS-ME hereby irrevocably makes, constitutes and appoints ABCBS-ME the true and lawful attorney of BCBS-ME, with full power of substitution, for and in the name and stead of BCBS-ME but at the expense and on behalf and for the benefit of ABCBS-ME, to demand and receive from time to time any and all property, tangible and intangible, constituting any of the Assets and to give receipts and releases for and in respect of the same and any part thereof and, from time to time, to institute and prosecute in the name of BCBS-ME, but at the expense and for the benefit of ABCBS-ME, any and all proceedings at law, in equity or otherwise, which ABCBS-ME may deem proper to collect, assert or enforce any claim, right or title of any kind in respect of any of the Assets and to defend and compromise any and all actions, suits or proceedings hereafter instituted in respect of any of the Assets and to do all such acts and things in relation to the Assets as ABCBS-ME shall deem desirable, except in all cases as otherwise contemplated by the Purchase Agreement.
  4. TRANSFERRED POLICIES
    1. Assignment. Subject to the terms and conditions of this Agreement and the provisions of 24.A M.R.S.A. Section 3483, and with the approval of the Maine Superintendent of Insurance, effective as of the Transfer Date, BCBS-ME agrees to and does hereby convey, transfer and assign to ABCBS-ME, and ABCBS-ME agrees to and does hereby assume from BCBS-ME, the Transferred Policies. BCBS-ME agrees to execute such additional documents and instruments and take such additional actions as may be necessary or desirable to evidence or effectuate the foregoing assignment.
    2. Acceptance. Subject to the terms and conditions of this Agreement and the provisions of 24.A M.R.S.A. Section 3483, and with the approval of the Maine Superintendent of Insurance, ABCBS-ME does hereby accept the foregoing assignment, conveyance and transfer and agrees to perform, observe, and discharge all of the duties, obligations and undertakings of BCBS-ME under the Transferred Policies, including liability for loss or damage occurring under the Transferred Policies in accordance with the original terms thereof. ABCBS-ME shall be entitled to any and all rights, defenses, offsets, counterclaims, crossclaims and actions on the Transferred Policies that are now or would have been available to BCBS-ME had this Agreement not been made. It is expressly provided that, by executing this Agreement, no such rights, defenses, offsets, counterclaims, crossclaims, or actions are or will be waived, but the same are expressly preserved, and ABCBS-ME shall be duly subrogated thereto whether the same are now known to exist or may hereafter be discovered. ABCBS-ME agrees to execute such additional documents and instruments and take such additional actions as may be necessary or desirable to evidence or effectuate the acceptance and assumption of the foregoing assignment.
    3. Certificate of Assumption. If required by the Maine Superintendent of Insurance, ABCBS-ME shall duly issue a Certificate to each policyholder and/or legal owner of a Transferred Policy evidencing the assumption of liability undertaken in Sections 4.1 and 4.2. The Certificate shall be substantially in the form of Exhibit A attached hereto.
    4. Premiums, Property of ABCBS-ME. All premiums and other receipts on the Transferred Policies or otherwise received after the Transfer Date shall be the sole property of ABCBS-ME, and BCBS-ME shall have no right, title or interest therein.
    5. Collection and Endorsement of Receivables. ABCBS-ME shall have the right and authority to collect for its account all receivables and other items which shall be transferred by BCBS-ME to ABCBS-ME and to endorse, without recourse and without warranties of any kind, the name of BCBS-ME on any checks or other evidences of indebtedness received by ABCBS-ME on any of the Transferred Policies.
  5. GENERAL PROVISIONS
    1. Severable Terms. The invalidity or unenforceability of any term or provision in this Agreement shall not affect the validity or enforceability of any other term or provision of this Agreement.
    2. Waiver. Waiver of a breach of any provision of this Agreement shall not be deemed a waiver of any other breach of the same or a different provision.
    3. Amendment. This Agreement may be amended only by the mutual written consent of the parties.
    4. Headings. Headings are solely for convenience and shall not be used in interpreting the text of this Agreement.
    5. Construction. This Agreement shall be construed and administered in accordance with the laws of the State of Maine.
    6. Purchase Agreement. This Agreement is subject to all of the terms and conditions of the Purchase Agreement, which shall prevail in the event of a conflict between the provisions hereof and the provisions thereof.

IN WITNESS WHEREOF, the parties have executed this Agreement by their duly authorized officers.

ASSOCIATED HOSPITAL SERVICE OF MAINE d/b/a BLUE CROSS AND BLUE SHIELD OF MAINE ANTHEM HEALTH PLANS OF MAINE, INC.

By: _______________________________

Title:

By: ______________________________

Title:

EXHIBIT A

ANTHEM HEALTH PLANS OF MAINE, INC.

CERTIFICATE

Effective Date: _____________________, ____

THIS IS TO CERTIFY that, pursuant to the terms of an Bulk Reinsurance Agreement dated _________________, ____, Anthem Health Plans of Maine, Inc. d/b/a Anthem Blue Cross Blue Shield of Maine ("ABCBS-ME"), a Maine insurance corporation licensed to write accident and health insurance, has assumed all liability for the medical and health benefits provided by your insurance policy or health care benefit contract and all endorsements thereto (herein called the "Policy") issued by Associated Hospital Service of Maine, formerly doing business as Blue Cross and Blue Shield of Maine ("BCBS-ME").

All of the terms, conditions and provisions of the Policy issued to you by BCBS-ME remain unchanged and in full force and effect except that ABCBS-ME has become the responsible party and has assumed all liability under the Policy for medical and health benefits.

ABCBS-ME conducts its operations from the same offices and with the same phone numbers as those previously used by BCBS-ME. Accordingly, all premium payments, requests for service, claims, notices or other inquiries should be made to ABCBS-ME at the same address and same phone numbers as you currently use with BCBS-ME.

By making your next premium payment to ABCBS-ME, you consent to ABCBS-ME becoming the issuer of the coverages under your Policy in substitution of BCBS-ME.

IN WITNESS WHEREOF, ABCBS-ME has caused this Certificate of Assumption to be executed and attested to be effective ______________________, ______.

ANTHEM HEALTH PLANS OF MAINE, INC.

By:_____________________________________

By:_____________________________________

THIS CERTIFICATE BECOMES A PART OF AND SHOULD BE ATTACHED TO YOUR POLICY.