§ 23-63-502 — Legislative findings

(a) (1) It is found and declared that it may not be inconsistent with the public interest and the interest of policyholders and shareholders to permit insurers to: (A) Engage in activities which would enable them to make better use of management skills and facilities; (B) Diversify into new lines of business through acquisition or organization of subsidiaries; (C) Have free access to capital market which could provide funds for insurers to use in diversification programs; (D) Implement sound tax planning conclusions; and (E) Serve the changing needs of the public and adapt to changing conditions of the social, economic, and political environment so that insurers are able to compete effectively and to meet the growing public demand for institutions capable of providing a comprehensive range of financial services. (2) It is further found and declared that the public interest and the interests of policyholders and shareholders are or may be adversely affected when: (A) Control of an insurer is sought by persons who would utilize the control adversely to the interests of policyholders or shareholders; (B) Acquisition of control of an insurer would substantially lessen competition or create a monopoly in the insurance business in this state; (C) An insurer which is part of a holding company system is caused to enter into transactions or relationships with affiliated companies on terms which are not fair and reasonable; or (D) An insurer pays dividends to shareholders which jeopardize the financial condition of the insurer. (3) It is declared that the policies and purposes of this subchapter are to promote the public interest by: (A) Facilitating the achievement of the objectives enumerated in subsection (a) of this section; (B) Requiring disclosure of pertinent information relating to changes in control of an insurer; (C) Requiring disclosure by an insurer of material transactions and relationships between the insurer and its affiliates, including dividends to shareholders paid by the insurer; and (D) Providing standards governing material transactions between the insurer and its affiliates. (4) It is further declared that it is desirable to prevent unnecessary multiple and conflicting regulation of insurers. (b) Therefore, this state shall exercise regulatory authority over domestic insurers and, unless otherwise provided, not over nondomestic insurers, with respect to the matters contained herein.

Legislative History

Acts 1971, No. 288, § 2; A.S.A. 1947, § 66-5002.