On May 24, Attorney General Eliot Spitzer announced that he had conditionally approved the conversion of Empire Blue Cross and Blue Shield to publicly traded status. He said that if the conditions are met and necessary legislation is passed in Albany, then he will have no objections to the plan. Attorney General Spitzer noted that it is not the role of his office to judge the merits of the conversion from a business perspective, but instead to uphold State law and protect the public interest.

Upon its conversion, Empire would create a new, charitable foundation that would receive 100% of the stock of the new, for-profit company. This stock would represent the value of the charitable asset created over the years by virtue of Empire's not-for-profit, publicly supported status. However, the national Blue Cross and Blue Shield Association imposes restrictions that limit the voting rights of any single Blue Cross shareholder to 5% of outstanding stock; therefore, no matter how much is actually owned, the foundation's role in governing the new, for-profit Empire would be limited. The conceptual agreement between Empire and the Attorney General addresses this concern by, among other things, providing that six of 15 new Empire board members would be appointed from a list of individuals to which the foundation and the new Empire mutually agreed, that the foundation would be able to exercise its full voting rights with respect to certain matters and retain a right to bring legal actions in certain circumstances, and that the foundation and Empire would jointly plan the timing of public stock offerings for the new company.

In response to the news, GNYHA reiterated its long-standing belief that publicly traded health care companies do not benefit the public. The debate now shifts to Albany, where the Legislature is considering three bills that would permit the conversion, including one proposed by Governor Pataki. In a May 25 press statement, Insurance Department Superintendent Neil Levin urged swift legislative action, "so that Empire can continue to protect customers and policyholders by ensuring that it is well positioned in the marketplace and sufficiently capitalized."