WIXLIB

OmedaRx. Inc, is an Oregon for-profit taxable corporation that operates as a pharmaceuticalbenefits management program contracting with pharmacies, processing prescription claims,reviewing medication formularies, and providing educational tools for members and doctors.OmedaRx is a wholly owned subsidiary of Gambia.Direct Health Solutions Corporation is an Oregon corporation incorporated on April 4, 2012, toact as a holding company for various insurance related businesses. It owns two direct subsidiaries.and one indirect subsidiary as follows:MedSavw. Inc, is a website that provides information about the effectiveness and cost ofprescription medications for patients, caregivers and doctors. It assigns evidence-basedletter grades to medications, making them easier to compare. Grades are based on objectivecriteria developed from best practices in evidence-based medicine, and assigned by a teamof pharmacists who have specialized training in clinical evidence review and evaluation.HealthSparq, Inc, was incorporated in Oregon on August 9, 2013, and is an onlinemarketplace for employers and health providers. It is an integrated solution that transformshealth by turning health care data into consumer information. HealthSparq, Inc. owns onedirect subsidiary as follows:Prism Services Group. LLC is a limited liability company that provides a webbased tool that allows health care consumers to search for providers, estimatehealthcare costs and learn more about their health and wellness community.Gambia Health Foundation is an Oregon tax-exempt, private foundation established by Gambia onJune 11, 2007, as a 501(c)(3) corporation. It was formed to provide eleemosynary contributionsin Idaho, Oregon, Utah and Washington, which benefits three core areas: 1) building healthierRegence BlueCross BlueShield of Oregon10:

-.'r: if5'.communities, 2) transforming health care, and 3) end-of-life issues. Its primary mission is toincrease access to medical care for those who cannot afford it, while delivering and coordinatingcare with innovative methods that improve outcomes and address disparities in eare.Additional direct and indirect subsidiaries of Gambia include:Joumi. Ine. is a for-profit Oregon Corporation healthcare solutions company offering a mobileenabled application that allows personnel to get health advice, find in-network providers, makeappointments, view health history and deductible information available to organizations that offerhealth and wellness benefits to employees in the four states where Carribia operates its health plans.It is 100% owned by Gambia.Cascadia Echo Holding Company is a Washington for-profit investment management companyformed in 2016 by Gambia Health Solutions with various contributions from the plans. It is mainlyfunded through RBS, which has a 70.254% ownership interest. It ovras 50% of Echo HealthVentures, LEG. This Holding Company is used to invest in non-insurance related entities whichprovide various services focusing on the consumer such as IT services; programs/applications.pharmacy benefit management services, network management, and health md wellness serviees.LifeMap Coordinated Services. Inc, is an Oregon for-profit corporation that is a life insuranceagency. This company is 100% owned by LifeMap Assurance Company.Capitol Health Care Management, Inc, is an Oregon for-profit corporation that serves as adownstream holding company to own all stock of HMO subsidiaries. This company is 100%owned by Regence HMO Oregon.Regence BlueCross BlueShield of Oregon11

V5200 Market Associates LP is an Oregon limited partnership formed on April 5, 1990, to hold andmanage a commercial office building and park in Portland, Oregon. Market Building, LLC is thegeneral partner. RBCBSO is a Class B limited partner (50% ownership interest) and John W.Russell is a Class C limiter partner. The partnership owns and operates the 200 SW Market Streetcommercial office building.CSN Acquisition Corporation is a Washington for-profit insurance agency formed on March 31,1999, and is a wholly-owned subsidiary of RBS.Healthcare Management Administrators, Inc, is a Washington corporation formed on March 20,1986.It acts as a third-party administrative company for self-funded employers located inWashington and Oregon, offering access to providers as a preferred provider organization (PPO)and participating networks. It is 100% owned by RBS.Group Services. Inc, is a Utah for-profit corporation formed as an insurance agency on April 17,1974. This company is 100% owned by RBCBSU.ValueCare is a Utah for-profit PPO network management company formed on September 11,1984. It is 100% owned by RBCBSU.BCSU Professional Services Corporation is a Utah for-profit facility management companyformed on February 5, 1986. It is 100% owned by RBCBSU.RBCSU Realty Holding Corporation is a Utah for-profit company acting as a downstream holdingcompany to 100% own RBCSU Realty, LLC, a limited liability corporation formed to own aRegence BlueCross BlueShield of Oregon12

commercial office building in Salt Lake City, Utah (Utah Cottonwood building). It is 100% ownedby RBCBSU.Pando Health Ventures, LLC is a Utah for-profit limited liability company formed on July 8,2015,with the University of Utah to pursue activities that further the not-for-profit health goals of eachjoint venture member. This company is 50% owned by RBCBSU.INTERCOMPANY AGREEMENTSThe following agreements are in place between the Plan and its affiliates or subsidiaries within theinsurance company holding system:Plan and Asreement ofAffiliationEffective May 1, 1995, and amended July 28, 1997, the Plans from Idaho, Oregon, Utah andWashington agreed to form a non-profit holding corporation (now known as Cambia HealthSolutions) to become the sole corporate member of RBSBSORBCBSO, RBCBSU and RBS. Afourth plan, Regence Blue Shield of Idaho, Inc. (RBSI), is a mutual insurer and became affiliatedthrough a separate agreement. The four plans also agreed to create a business plan to consolidatecertain operations and functions to achieve desired economies.Administrative Service AsreementEffective December 28, 2007, Cambia agrees to provide all operational, administrative andmanagement services reasonably necessary to transact business, including managerial, legal.financial, actuarial, underwriting, accounting, human resources, employee benefits administration.data network/telecommunications, marketing, advertising, community affairs, public relations.communications, billing, banking, membership, claims adjudication, customer service, reporting.Regence BlueCross BlueShield of Oregon13.1

regulatory compliance, mail, and information technology services. In addition, Gambia shallprovide all equipment, materials, office space, and general supplies. The Plan shall pay Gambiaits proportionate share of the cost as well as its proportional share of general overhead expenses.according to a system-wide cost allocation methodology and in accordance with generallyaccepted cost accounting principles.It is intended that Gambia shall receive completereimbursement for its costs and derive no profit from such reimbursement. All direct and indirectexpenses incurred will be reconciled monthly and balances settled within 90 days from the end ofthe reporting month.Insolvency AgreementsThe Plan entered into an agreement on August 1, 1991, with its downstream subsidiary, RegenceHealth Maintenance of Oregon, Inc. On June 1, 1995, a separate agreement was entered intobetween the Plan and its direct subsidiary, Regence HMO Oregon. Both agreements require thePlan to make certain payments for covered services and to protect members from incurring liabilityin the event of the insolvency of the subsidiaries. A third agreement dated December 2012,replaced a missing contract between the Plan and LifeMap Assurance Gompany to guarantee allcontractual and financial obligations to its customers in the event of the insolvency of LifeMap.Effective December 15, 2020, the Plan terminated the insolvency agreements that guaranteed allcovered liabilities for Regence HMO Oregon and Regence Health Maintenance of Oregon, Inc.Regence BlueCrbss BlueShield of Oregon14'hi

1' Guaranty AereementThe Guaranty Agreement was entered into on November 14, 2005, whereby the Plan agreed toguarantee the loan on its headquarters building in Portland, Oregon, which included liability forthe full and timely payment of a 61 million promissory note.Consolidated Federal Income Tax AgreementEffective January 1, 1997 (although the agreement was not signed until September 20, 2000),Gambia agrees to file a consolidated federal income tax return, including any liability foralternative minimum tax. The tax liability is then allocated to each member of the affiliated group.computed as if a separate return was filed. Any credits or operating losses shall be allocated tothose members with the credits or generating the losses. Payment of estimated installments duefor such taxable periods shall be paid within 30 days of receiving notice. Final settlements for atax year must be paid within 30 days after the filing of the consolidated return.FIDELITY BOND AND OTHER INSURANCEThe examination of insurance coverages involved a review of adequacy of limits and retentions.and the solvency of the insurers providing the coverages. The Plan's insurance coverages areprovided through insurance policies from unaffiliated carriers, and coverage protected the Planand all subsidiary and affiliated companies were listed as a named insured. The group as a wholeis insured up to 10,000,000 per occurrence, after a 200,000 deductible, against losses from actsof dishonesty and fraud by its employees and agents. Fidelity coverage was found to meet thecoverage level recommended by the NAIC.'i'Regence BlueCross BlueShield of Oregon15

Other insurance coverages in force at December 31,2020, were found to be adequate, and are asfollows:Property liabilityInternational liabilityExcess liabilityGeneral liability, auto, employee benefitsManaged care errors & omissionsUmbrella liabilityCyber liabilityForeign liabilityEmployment practices liabilityDirector’s and officer’s liabilityWorkers’ compensationFitness center - general and excess liabilityTERRITORY AND PLAN OF OPERATIONDuring the period under examination, the Plan offered a full line of health insurance products forlarge and small employer groups, individuals and government employee programs, includingMedicare, and Medicare supplement coverage. The Plan also offered a range of supplementali.products such as dental, vision and prescription drug coverage. The Plan covers all of Oregon andparts of southern Washington.The Plan also participates in the Federal Employee Program (FEP) and the BlueCard Program.FEP is a nationwide contract with the Federal Office of Personnel Management to provide healthbenefit coverage to federal employees and their dependents. The BlueCard Program is a BlueCross Blue Shield Association (BCBA) nationwide program that enables members who needhealth care services while traveling or living in another BCBSA Plan’s service area to access localPlan’s providers. Iri addition, the Plan offers a broad range of health benefit services for selffiinded plans including claims processing, stop-loss insurance, actuarial and reporting services.medical cost management and other administrative services.The plan reported total enrolled members over the past five years as follows:Regence BlueCross BlueShield of Oregon16

Line of BusinessIndividual hospital & medicalGroup hospital & medicalMedicare supplementVision onlyDental onlyFEHBPMedicare*MedicaidOtherTotal 82.774At year-end 2020, the Plan reported direct business, as follows:StateOregonWashingtonDirect Premiums Written 2,006,761,863292.729.363 2.299.491.226TotalGROWTH OF THE COMPANYGrowth of the Plan over the past five years is reflected in the following schedule. Amounts werederived from Plan's filed annual statements, except in those years where a report of examinationwas published by the Oregon Division of Financial Regulation.YearAssets2016 531,722,480,3852017201820192020Capital andSurplusLiabilities 4.046*Per examination. Regence BlueCross BlueShield of Oregon17 6,339Net Income(Loss) 30,214,85678,766,13262,224,11760,605,62872,756,804

; - )l 3-riLOSS EXPERIENCEThe following exhibit reflects the annual underwriting results of the Plan over the past five years.The amounts were obtained from copies of the Plan's filed annual statements and, where indicated,from the previous examination Claim(2) (3)/(l)TotalRevenuesTotal Hospitaland MedicalMedicalLoss RatioAdjustment andGeneral ExpensesCombinedLoss Ratio 942,280,463,076 301,846,809,20084.0%83.7%82.5%86.1%81.0% 9,44198.4%95.7%96.3%98.6%95.5%* Per examinationA combined claims and expense to premium ratio in excess of 100% typically indicates anunderwriting loss. The Plan reported underwriting gains in each of the past five years.REINSURANCEAssumedEffective January 1, 2006, the Plan entered into a reinsurance agreement with Asuris NorthwestHealth (Asuris) to assume 100% of the liability incurred under Asuris Medicare Script insurancepolicies issued by Asuris to individuals in Oregon on or after the effective date. EffectiveJanuary 1, 2020, the Plan amended the agreement to include a settlement clause and an entireagreement clause.Effective January 1, 2000 the Plan and LifeMap entered into an Individual Short-term MajorMedical Excess Medical Agreement whereby the Plan agrees to indemnify LifeMap 100% of theexcess liability resulting from LifeMap’s covered claims under its individual short term medicalRegence BlueCross BlueShield of Oregon18

'- In. ma.policy for sickness or injury incurred on or after the effective date for individual claims in excessof 100,000 with a lifetime maximum of 1 million for any one person.Effective October 1, 2020, the Plan and LifeMap entered into a Reinsurance Agreement wherebythe Plan assumed 100% of group stop loss policies issued by LifeMap, including all claimsincurred on or after the effective date under new and renewed reinsured policies. Thereinsurance provided by the Plan is limited to reinsured policies written and insured by LifeMapin the state of Washington.CededEffective January 1, 2014, the Plan ceded 100% of its accidental death benefits included incertain individual and group medical policies to LifeMap. Effective January 1, 2020, the Planamended the agreement to include a settlement clause and an entire agreement clause.Effective January 1,2014, the Plan ceded 100% of the liability for eligible high risk patientclaims to the Oregon Health Authority. Effective January 5, 2015, Gambia entered into anExcess of Loss contract with HM Life Insurance Company that reinsures them against highcommercial, retrospective, federal exchange and stop loss claims in excess of 2 million for itsfully insured members. The agreement was subsequently terminated and replaced with aMedical Excess of Loss agreement between Gambia (including the Plan) and QBE ReinsuranceCorporation, which included a settlement clause. Under the agreement, QBE will cover anyclaims incurred for a member exceeding Gambia’s retention of 3,500,000 ultimate net loss.Effective April 1, 2018, the Plan entered into a Stop-Loss Policyholder Transition agreementwith Commencement Bay Risk Management Insurance Company whereby the Plan exited theRegence BlueCross BlueShield of Oregon19v.'!

:‘i; iifcstop-loss market in Oregon and exclusively endorsed Commencement Bay as its recommendedalternative carrier, based on each renewal date for the Plan’s stop-loss policies.Effective April 1,2018, the Plan and LifeMap entered into a Stop-Loss Policyholder Transitionwith Commencement Bay, whereby the Plan ceased offering reinsured coverage for LifeMapstop-loss policies, LifeMap exited the stop-loss market in Washington, and LifeMap exclusivelyendorsed Commencement Bay as its recommended alternative carrier, based on each renewaldate for its stop-loss policies.Each of the reinsurance agreements contained a proper insolvency clause in accordance with ORS731.508(3) as required to take r

examination of this health care service contractor was completed as of December 31, 2017. This . criteria developed from best practices in evidence-based medicine, and assigned by a team . FSA, MAAA, Lead Consulting Actuary Lisa Parker, ASA, MAAA, Life and Health Actuary & Actuarial Senior Associate Tom Hayden, CISA and IT Manager.