Corewell Health

“Delegate broad authority to a committee: committees - the chair of the board of directors may establish such standing or special committees from time to time as he or she will deem appropriate to conduct the activities of the corporation, and will define the powers and responsibilities of such committees. Persons who are not members of the board of directors will be eligible to serve on committees other than the executive committee. The members and chair of all committees will be appointed by the chair of the board of directors for a one (1) year term or until their successors are duly elected, but will be subject to removal at any time by the chair of the board of directors. A committee will have the specific powers and responsibilities as determined by the board of directors excluding those powers and responsibilities retained by the shareholders or board of directors pursuant to the articles of incorporation or bylaws of the corporation. Executive committee - the chair of the board of directors may appoint an executive committee consisting of the chair of the board of directors, the vice chair, and such additional directors as the chair of the board of directors may determine from time to time. The executive committee may exercise all powers and authority of the board of directors in managing the corporation between meetings of the board of directors (within the limits prescribed by the articles of incorporation or bylaws of the corporation or by law) or may have such specific powers and responsibilities as determined by the chair of the board of directors.”

“Family/business relationships amongst interested persons: praveen thadani, christina freese decker and matthew cox have a business relationship as they serve as an officer or director of priority health managed benefits, inc. A related taxable entity.”

“Significant changes to organizational documents: note that references in organizational documents are specific to the entity corewell health f/k/a spectrum health - the majority shareholder of priority health. The authority matrix for capital expenditures and loans to non-spectrum health entities, debt, capital investments and swaps, and other financial arrangements were updated in the organization's bylaws.”

“Classes of members or stockholders: the organization has two shareholders as follows: corewell health (ein 38-3382353), class a shareholder - 94.44% munson healthcare (ein 38-2640544), class b shareholder - 5.56% all shareholders are tax-exempt internal revenue code section 501(c)(3) organizations.”

“Members or stockholders electing members of governing body: election of members and their rights from priority health bylaws: 6.2 number and class of directors. The board of directors will be composed of not less than fifteen (15) and not more than twenty-one (21) members, to be determined as followed: 6.2.1 in addition to the requirement of mcl 500.3511(1), if applicable, that at least one member of the board of directors represents the membership of the health maintenance organization, at least one-third (1/3) of the directors (including any member representative required by law) will be adult enrollees of priority health or an affiliate elected pursuant to section 6.3 below. At least one (1) of such adult enrollee directors will be from the corporation's northern service area that is also served by the class b shareholder 6.2.2 one (1) of the directors will be appointed by the class b shareholder. 6.2.3 the remainder of the directors will be appointed by the class a shareholder. If all of the class a shareholder director appointments are not full, the president of the corporation shall automatically be appointed as one of the class a shareholder appointees upon appointment to the position of president of the corporation and shall serve as an ex-officio voting member of the board of directors. 6.3 election of adult enrollee members. The governance committee or similarly delegated committee of the board of directors will solicit names of potential candidates from the members, shareholders, directors and community. The committee will submit to the board of directors a list of nominees for election to the board of directors as adult enrollee representatives. At least one (1) member will be nominated for each directorship to be filled at such annual meeting. No more than two (2) persons employed by or affiliated with any one (1) employer or other group may be nominated. 6.4 term. The adult enrollee members will be divided into three (3) classes, which will be as evenly divided as possible. The terms of office of the classes will expire in three (3) successive years, with one (1) class expiring each year. Each elected director will be elected for a term of three (3) years (except for the directors elected immediately after adoption of this section 6.4 who will serve the terms designated by the board of directors). The directors appointed by the class a and class b shareholders will serve one (1) year terms or until such time as their successor is appointed. The director appointed by the class b shareholder will serve until such time as his or her successor is appointed. 6.5 vacancies. Any vacancy in a board of director position designated by the class a and class b shareholders will be filled by the class a and class b shareholders, respectively. Any vacancy in a position for an adult enrollee will be filled by the remaining adult enrollees on the board of directors. Each person appointed to fill a vacancy will complete the unexpired portion of the original term of the director being replaced or such term as designated by the shareholder, following nonbinding consultation with the chair of the corporation's board; or (ii) allow the seat to remain vacant until an individual is appointed by the shareholder pursuant to section 6.4 of these bylaws.”

“Decisions requiring approval by members or stockholders: note that references in organizational documents are specific to the entity corewell health f/k/a spectrum health - the majority shareholder of priority health. Decisions subject to approval of shareholders (not members) certain decisions are subject to approval of shareholders. From priority health bylaws: 2.2 class a shareholder's reserved powers. The class a shareholder shall have the reserved powers set forth in this section 2.2. The corporation's board of directors may recommend action to the class a shareholder with respect to the reserved powers set forth in this section 2.2. The actions listed below may, notwithstanding any other provision of these bylaws or the articles, be unilaterally caused and/or taken by the class a shareholder, within its sole and exclusive power and discretion, and shall not be deemed authorized unless and until approved by the class a shareholder: 2.2.1 amendment of the articles of incorporation or bylaws of the corporation as provided in section 13.1 of these bylaws; 2.2.2 election and/or removal of the class a shareholder-appointed members of the corporation's board of directors pursuant to article vi of these bylaws; 2.2.3 election and/or removal of the corporation's chair of the board of directors; 2.2.4 hiring, discharge, and evaluation of the corporation's president following consultation with the corporation's board of directors pursuant to section 7.3; 2.2.5 adoption of the corporation's strategic plan(s); 2.2.6 adoption of the corporation's annual operating and capital budgets, and any amendments to such budgets in excess of the authority matrix amount; 2.2.7 all capital expenditures by the corporation in excess of that amount (the "authority matrix amount") set forth in the authority matrix for capital expenditures and loans to non-spectrum health entities (the "expenditure authority matrix"), a current copy of which is attached hereto as exhibit a and which may be amended from time to time by bhsh system ("spectrum health"); 2.2.8 all borrowings or guarantees of indebtedness by the corporation (or any entity controlled by the corporation), including any operating lease in an amount greater than one million dollars ($1,000,000.00) during the initial lease term, not including renewals and/or extensions; 2.2.9 all lending by the corporation (or any entity controlled by the corporation) to persons other than spectrum health or an entity controlled by spectrum health in excess of the authority matrix amount; 2.2.10 the corporation's investments of cash and/or reserves, whether on an individual basis or as part of a pooled investment strategy; 2.2.11 any merger or consolidation of the corporation (or any entity controlled by the corporation), or any other change in ownership percentages, control, or capital structure of the corporation (or any entity controlled by the corporation); 2.2.12 the purchase of all, or a majority of, another corporation, limited liability company, partnership or other legal entity's stock, membership interest, partnership interest, other ownership interest, or assets; 2.2.13 the creation of any entity controlled, directly or indirectly, by the corporation; 2.2.14 the sale or transfer of more than ten percent (10%) of the assets of the corporation (or any entity controlled by the corporation) to any person or entity not controlled by spectrum health; 2.2.15 dissolution of the corporation; 2.2.16 the selection, retention, and oversight of the outside auditors for the corporation (or any entity controlled by the corporation); and 2.2.17 in other cases when required by law or as otherwise provided in these bylaws. The class a shareholder, prior to exercising any of the reserved powers set forth above, shall notify the class b shareholder (provided such action is not taken at a duly called meeting of the shareholders, board of directors or any designated committee). 2.3 class b shareholder's reserved powers. Th”

“Review of form 990 by governing body the review process for this form 990 is as follows: 1. Preparation of the return is done by an external cpa firm and reviewed by the firm and organization's corporate tax manager and director. 2. The return is reviewed by the organization's finance and legal departments (including the svp, finance and svp, general counsel) and shared with the members of the finance committee and board of directors. 3. The organization's svp, finance reviews comments or questions received from members of the board of directors, if any, to address or to incorporate, as appropriate, into the return prior to filing.”

“Conflict of interest policy board of directors 1. Conflicts of interest must be disclosed to other members of the board of directors and board of directors members must not vote or use personal influence on any matter in which the director has a conflict of interest. 2. A person having a financial interest in a proposed transaction or arrangement may make a presentation at a meeting of the board of directors or committee considering that transaction or arrangement, but after that presentation he or she shall leave the meeting during discussion and voting on that proposed transaction or arrangement. The person having the financial interest shall not be counted in determining whether a quorum is present. 3. The chairperson of the board of directors or committee shall, if appropriate, appoint a disinterested person or committee (including outside advisors) to investigate alternatives to the proposed transaction or arrangement, and to advise whether the proposed transaction or arrangement is in the organization's best interest. 4. The board of directors or committee shall exercise due diligence to determine whether the organization can, with reasonable efforts, obtain a more advantageous transaction or arrangement that would not give rise to a conflict of interest. 5. If a more advantageous transaction or arrangement is not reasonably attainable under circumstances that would not give rise to a conflict of interest, the board of directors or committee shall determine by a majority vote of the disinterested directors and members whether the proposed transaction or arrangement is in the organization's best interest and for its own benefit and whether the transaction is fair and reasonable to the organization, and shall make its decision as to whether to enter into the transaction or arrangement in conformity with such determination. 6. The minutes of the meetings of the board of directors and all of the organization's committees shall set forth: a) the names of the persons who disclosed a financial interest in a proposed transaction or arrangement involving the organization or any of its subsidiaries and the nature of the financial interest; and b) the names of the persons who were present for discussions and votes relating to such transaction or arrangement, including any discussion of alternatives to the proposed transaction or arrangement, and a record of any votes taken in connection with that matter. The votes of individual members need not be recorded unless otherwise directed by the board of directors or committee. 7. There is an ongoing requirement that members of the board of directors complete another disclosure questionnaire at any point during his/her tenure on the board of directors when a new potential conflict of interest arises. If a member of the board of directors completes a disclosure questionnaire as a result of a new potential conflict of interest, that disclosure questionnaire is submitted to the legal and compliance departments for review. Management 1. Upon acceptance of an employment offer, each member of management completes a conflict of interest disclosure questionnaire. A copy of the member of management's disclosure questionnaire is sent to the compliance department. A copy of the member of management's disclosure is reviewed by the coi team and escalated to the coi committee if necessary. 2. Annually, each member of management completes an annual conflict of interest disclosure questionnaire electronically. The disclosure questionnaire is reviewed by the legal and compliance departments. 3. There is an ongoing requirement that members of management complete another disclosure questionnaire at any point during his/her employment when a new potential conflict of interest arises. If a member of management completes a disclosure questionnaire as a result of a new potential conflict of interest, that disclosure questionnaire is submitted to the legal and compliance departments. 4. The legal and compliance”

“Process to establish compensation of top management official the corewell health board of directors (through its compensation committee) uses the following process for determining compensation of the top management officials, other officers, and key employees at priority health. Labor market data reflecting comparable organizations and jobs (prepared by independent firms) are relied upon in setting compensation levels. Competitive assessment reports are provided to the compensation committee in advance of meetings. The competitive assessment report is prepared by a nationally known independent executive compensation firm. The following surveys, prepared by independent firms, were the primary sources referenced to obtain market data for the review: *bdo: 2021 usa health insurance plans survey *gallagher (formerly integrated healthcare strategies): 2021 national healthcare leadership compensation survey *mercer: 2021 ihn healthcare compensation survey *mercer: 2021 ihn health plan compensation survey *sullivan cotter associates: 2021 manager and executive compensation in hospitals and health systems survey in addition, general industry surveys were referenced: *mercer: 2021 us executive remuneration suite *willis towers watson: 2021 executive compensation survey in addition to the above data sources, the compensation committee approved the creation of a custom peer group of high performing integrated health systems to ensure robust data and a relevant comparator universe. The peer group organizations are approved by the compensation committee and consists of healthcare systems similar in revenue size, market competitors, high performers, financially stable as indicated by bond rating and that follow a similar strategy (multi-site systems, health plans). Data for the peer group organizations is compiled by the independent executive compensation firm. Compensation adjustments are approved by compensation committee members, consistent with the corewell health compensation philosophy described below. Minutes of committee discussions and decisions are prepared to memorialize compensation committee decisions based upon the above data. Cash compensation data relied upon by the compensation committee is national and reflects the compensation paid to executives in comparable jobs in comparably sized health care and / or health insurance organizations. Corewell health recruits nationally for its executives. Benefits data reflect national health care / health insurance market practices. This process is intended to assist corewell health in qualifying for the rebuttable presumption of reasonableness (intermediate sanctions regulations) and complying with the corewell health excess benefit transaction policy for those individuals in the group who are disqualified persons. The opinion submitted from the third-party independent consulting firm is in accordance with the provisions of treasury regulations section 53.4958-6(c)(2) and is also intended to satisfy the professional advice requirement of treasury regulations section 53.4958-1(d)(4)(iii).”

“Other changes in net assets: change in nonadmitted assets: ($37,115,113) net unrealized gain(loss) on subsidiaries: ($52,242,404) ------------- ($89,357,517)”

“Required documents available to the public the organization's articles of incorporation and statutory financial statements are on file with the state of michigan and available to the public on the state's website. The organization's bylaws and internal policies are generally not made available to the public. The overall system consolidated financial statements are provided at https://www.corewellhealth.org/about-us.”

“Compensation of directors based on external opinion by sullivan cotter and associates, inc., priority health compensates board members in a manner that is reasonable in relation to market data. Board of directors compensation is reviewed annually by internal staff to confirm compensation falls within reasonable limits. Any compensation amount is treated as taxable to the board member and is reported and provided to them on form 1099 or w-2, as required according to the reporting thresholds. Certain board members are employed by a related organization.”

“Individuals compensated more than $100,000: there are no individuals reported as all are employed by the parent organization corewell health. Refer to the disclosure for form 990, part v, line 2a for further detail.”

“Program service description - priority health hmo priority health is an integral part of corewell health, an integrated not-for-profit health system serving communities throughout michigan. Priority health's mission, led by its community board, strives to return value to the communities served beyond the provision of health care to its members. Priority health has built a long history of offering michigan employers and individuals progressive products and innovative programs intended to keep costs down and members healthy. Its broad portfolio of products and services includes traditional medical plans as well as hsa's, hra's and other consumer-driven products. Priority health has consistently maintained accredited status with a 4.5 out of 5 star rating for its hmo products from the national committee for quality assurance (ncqa), an independent managed care accrediting body. Priority health has also maintained an "a" (excellent) financial strength rating for seven consecutive years from a.m. Best, a health insurance ratings agency, recognizing the financial strength of the organization and focus on managing the cost of health care for its community. In early 2020, priority health completed a merger with total health care, inc., a health plan based in southwest michigan. The medicaid business was integrated into priority health choice, inc. While the commercial business was integrated into priority health in 2022. As part of this merger, a foundation was established to which priority health committed $25 million to focus on improving health in detroit area communities. The foundation will support and invest in health care initiatives that increase access, improve outcomes, and having a meaningful impact on the lives of the people in and around the city of detroit. The foundation has distributed $14,351,290 in support of health care initiatives since its inception. Priority health's majority shareholder, corewell health is a not-for-profit health system that provides care and coverage with an exceptional team of 60,000+ dedicated people-including more than 11,500 physicians and advanced practice providers in 22 hospitals, 300+ outpatient locations and several post-acute facilities. Corewell health provided over $1 billion in community benefit during calendar year 2022. Corewell health is one of the top health systems in the country and expanded its footprint with its 2022 integration of beaumont health in southeast michigan. The affordable care act (aca) added new requirements that hospital organizations must satisfy in order to maintain tax exempt status under irc section 501(c)(3). One of the requirements under this act is to conduct a community health needs assessment (chna) and adopt an implementation strategy at least once every three years. Corewell health completed several implementation plans identifying the community health needs and implementation plan goals for each corewell health hospital. One need identified in the chna's is access to health care, which includes improving access to affordable health care for all community members. In addition, all community members should have access to preventive care and medical home care, including the uninsured and low-income working individuals. Corewell health works closely with priority health to achieve the identified needs and goals. Priority health pursues initiatives that support the triple aim of enhancing the quality and experience of care for the patient, improving the health of populations, and reducing the costs of healthcare. In 2022, priority health lowered health costs across all lines of business by over $20 million in incremental savings through new or expanded managed care initiatives and chronic disease management programs. These programs influence physician practices, promote appropriate health care utilization and increase quality, which extends beyond priority health's members. In addition to the managed care savings above, priority health pursues initiati”

“As a requirement of the aca, each state selects an essential health benefits "benchmark plan" that serves as a reference for all other health plans to follow (individual and small business), when designing the scope and limitations surrounding covered services. A benchmark plan is chosen by each state every five years. Priority health was selected as the state's benchmark plan in 2012 and is the only health plan in michigan to ever earn this designation. Starting in 2017 (continuing in 2018 and forward), the michigan department of insurance and financial services (difs) has recommended the priority health hmo plan to continue to serve as the essential health benefits benchmark for the state. The recommendation underscores priority health's ability to deliver incredible value and create innovative solutions that impact health care costs while maximizing customer experience. Priority health's hmo plan was selected because difs believes it achieves the best balance between comprehensiveness and cost-effectiveness for michigan consumers. The michigan association of health plans (mahp), an industry voice for the state's health care plans, recognizes best practices in health plans by sponsoring the pinnacle awards. Health plans are recognized for achievements in addressing the challenges of a shifting healthcare environment through improvements in operations, clinical services, disease management and community outreach. The pinnacle award continues to serve as an emblem of excellence to the member plans that are recognized. Priority health continues to be recognized for its development of programs that have led to increased efficiency and patient care, helping lower costs, and increase service to its michigan patients by the michigan association of health plans. Priority health hopes to continue its history of being recognized for its focus on improving health while lowering cost. In 2021, following a year in whch the pinnacle awards were postponed due to the covid-19 pandemic, 8 michigan health plans from across the state submitted 24 programs demonstrating creative approaches to solving problems and improving services in the commerical, medicare, and medicaid sectors. These 24 groundbreaking programs considered for mahp's annual pinnacle awards, show an entrepreneurial spirit and an interest in serving members as well as to increase efficiency and improve patient health care while lowering costs and increasing service to michigan citizens. A panel of 9 judges, representing other healthcare organizations, government, and businesses thoroughly reviewed and deliberated the 24 submissions and selected priority health as one of the winners of a 2021 pinnacle award. In 2021, priority health won a pinnacle award for its medicaid product with their asthma environmental housing project. The priority health medicaid asthma environmental housing program reduced emergency department visits by 61.4% and decreased annual medical spending by over $675,000. The program's goal was to improve housing related aspects of poorly controlled asthma for 25 households in kent county. The program provided households with tailored asthma education, an asthma management plan, community health worker support, care management services, if necessary, and housing repairs or removal of environmental triggers where possible. Priority health won a 2019 pinnacle award for community outreach by a single plan. Priority health, while working closely with mahp's children's special health care services ("cshcs") and their families, was quick to identify needs and gaps in knowledge related to care coordination between these families and the community providers they rely on to serve them. In response to these findings, priority health launched the medically complex children's information sharing events. These events are held quarterly to provide a venue for health care providers and community partners who work with the cshcs population to network, share information, establ”

“Priority health began offering medicare advantage plans in july 2005 and medicare advantage plans with prescription drug coverage in january 2006. Its medicare advantage plans vary in price based on where members live and what benefits they need. More than 226,000 michiganders have a priority health medicare advantage plan, and nearly 17,600 chose a priority health medicare supplement plan, also known as medigap. Priority health strives to collaborate with the community and make medicare simple to understand. That is why it wrote and published "medicare advantage for dummies." it was written in cooperation with wiley publishing, owners of the dummies series. The book has been distributed free to over 255,000 people across michigan and downloaded countless times as it is now available electronically as an e-book. As a result of priority health's work with the community and dedication to delivering high quality coverage, its medicare advantage hmo-pos and ppo plans were accredited with the national center for quality assurance (ncqa), with our hmo-pos plans earning a 4.5 rating out of 5. Priority health's 2022 medicare advantage plans with prescription drug coverage were also awarded 5 out of 5 stars by the centers for medicare and medicaid services (cms). The medicare star ratings indicate how well a health plan performs overall; the better the star rating, the higher quality care and experience is delivered. Of the 42 quality and improvements metrics used to determine our overall quality rating of 4.0, approximately 75% of the metrics were either 4 or 5 stars. Priority health is able to provide its members high quality medicare advantage plans while remaining among the lowest cost plans in the country. Medicare advantage members can enroll either individually, or through an employer group. During the 2022 medicare annual enrollment period (aep). Priority health's medicare advantage enrollment includes about 226,000 individual advantage members of the total individual medicare advantage market, making priority health the leader in michigan. Priority health individual medicare advantage plans are offered in all 68 counties in michigan's lower peninsula, with 9 out of 10 primary care providers and all major hosptial systems in our network in the lower peninsula. With 98% of providers, including all major hospital systems, in our network. Priority health's network has nearly 45,000 providers. In 2012, priority health launched home based primary care (hbpc) as a pilot with our affiliate, corewell health medical group (chmg). Hbpc brings the care team into the home of patients that are at the far end of the population health continuum, the advanced chronically ill, whose multiple medical conditions are complicated by functional and/or cognitive limitations that make it difficult for them to adequately access the traditional ambulatory physician office. In addition to priority health changing how the patient accesses their care, there is now a team based model of care to meet all the needs of the patient. In 2022 priority health continued its engagement with patients having advanced illness in partnership with corewell health medical group and two other contracted providers which resulted in over $22.3 million in savings by reaching members enrolled in hbpc programs. Chronic conditions are leading contributors to rising health care costs nationwide. To address this, priority health launched the medication therapy management (mtm) pilot program with its medicare members. The mtm pilot program offered priority health medicare members the opportunity to meet one-on-one with pharmacists to review all of their medications including prescriptions, over-the-counter drugs, and herbal and vitamin supplements. Complex medication regimens create significant challenges for patients living with chronic illness, their caregivers, health care providers and the health care system as a whole. The impact of medication-related problems can be minimized”

“Prevention and wellness have been the foundation of priority health's approach to health care. Priority health provides wellness tools and resources via an online wellbeing platform within its commercial standard health plans. It also offers a standardized, best-in-class wellbeing engagement program named prioritywell to empower their employees to pursue healthier lifestyles. In addition to the health plan offerings, priority health participates in, and sponsors, wellness programs for the community at large to improve the health of all people, not just members. Staff hours of social media, television, podcasts and conference presentations were provided to the community to promote healthy living. Priority health's wellness programs addresses the overall wellbeing of its members. Employers are able to support the overall wellbeing of their employees and improve engagement, satisfaction and productivity, ultimately resulting in improved talent retention and a healthier workforce. Priority health partners with employers to help them deliver targeted, smart programs that effectively improve employee physical and emotional health while also improving workplace morale and reducing overall health costs with a personalized wellbeing approach. Additionally, disease prevention and intervention programs are available to members through a digital engagement environment. Priority health offers a wellbeing hub, which offers a personalized online wellness experience tailored to each employee's individual needs. The wellbeing hub, available to all priority health members, offers members access to content and tools centered on supporting stress management, nutrition, weight loss, quitting tobacco, chronic condition management, financial support, sleep health and more. Priority health sponsors many community education programs, health fairs, walks/runs/triathlons and newsletters. Priority health has developed an innovative digital member outreach program that relies on thousands of datasets and predictive analytics to help educate and inform our members. Using this data-driven approach, priority health is able to gain insights into challenges our members may face and identify actions they can take to improve or protect their health. Based on this information, priority health delivers personalized messaging on a variety of platforms to help members get the most from their plan. As an example, during the covid-19 pandemic, priority health targeted unvaccinated members to encourage them to get the vaccine, resulting in a significant increase in vaccinations for those who received the message. Additionally, the health plan delivered educational news through printed pieces to medicare members, the medicare quick start guide and the health journal.”

“Audited financial statements: the organization's financial statements are audited annually by an independent accounting firm. The no response to these questions relates to the fact that the gaap basis financial statements were prepared on a consolidated basis and not on a stand alone basis. The organization is audited annually on a stand alone basis and issues financial statements on a stand alone basis which are prepared in accordance with sap (statutory accounting principles), as required by regulatory authorities. The figures in this form 990 reconcile to the financial statements prepared under statutory accounting principles as submitted to the state of michigan and the national association of insurance commissioners (naic).”

“Number of employees reported on form w-3: all employees of priority health were employed during the year by corewell health (38- 3382353) and leased back to priority health. Salaries and wages, employee benefits and payroll taxes are allocated to priority health via a management fee. The salaries and wages reported in part ix statement of functional expenses reflects the portion of salaries and wages allocated to priority health. Corewell health filed all applicable irs tax filings including forms w-2 and w-3 on behalf of priority health.”

“Other changes in net assets: change in nonadmitted assets: ($37,115,113) net unrealized gain(loss) on subsidiaries: ($52,242,404) ------------- ($89,357,517)”

“Audited financial statements the organization's financial statements are audited annually by an independent accounting firm. The organization issues gaap basis financial statements which are prepared on a consolidated basis and not on a stand alone basis. The organization is audited annually on a stand alone basis and issues financial statements on a stand alone basis which are prepared in accordance with sap (statutory accounting principles), as required by regulatory authorities. The figures in this form 990 reconcile to the financial statements prepared under statutory accounting principles as submitted to the state of michigan and the national association of insurance commissioners (naic).”