§ 23-63-520 — Voting of securities

(a) When Prohibited. (1) No security which is the subject of any agreement or arrangement regarding acquisition, or which is acquired or to be acquired, in contravention of the provisions of this subchapter or of any rule or order issued by the Insurance Commissioner pursuant to this subchapter may be voted at any shareholders' meeting, or may be counted for quorum purposes, and any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though the securities were not issued and outstanding. (2) However, no action taken at any meeting shall be invalidated by the voting of the securities unless the action would materially affect control of the insurer or unless the courts of this state have so ordered. (3) If an insurer or the commissioner has reason to believe that any security of the insurer has been or is about to be acquired in contravention of the provisions of this subchapter or of any rule or order issued by the commissioner pursuant to it, the insurer or the commissioner may apply to the Pulaski County Circuit Court to enjoin any offer, request, invitation, agreement, or acquisition made in contravention of §§ 23-63-506 - 23-63-513 or any rule or order issued by the commissioner pursuant to it to enjoin the voting of any security so acquired, to void any vote of a security already cast at any meeting of shareholders, and for such other equitable relief as the nature of the case and the interests of the insurer's policyholders, creditors, and shareholders, or the public may require. (b) Sequestration of Voting Securities. In any case in which a person has acquired or is proposing to acquire any voting securities in violation of this subchapter or any rule, regulation, or order issued by the commissioner pursuant to it, the Pulaski County Circuit Court may, on such notice as the court deems appropriate and upon the application of the insurer or the commissioner, seize or sequester any voting securities of the insurer owned directly or indirectly by the person and issue such orders with respect thereto as may be appropriate to effectuate the provisions of this subchapter. Notwithstanding any other provisions of law, for the purposes of this subchapter, the situs of the ownership of the securities of domestic insurers shall be deemed to be in this state.

Legislative History

Amended by Act 2019, No. 315,§ 2632, eff. 7/24/2019. Acts 1971, No. 288, § 12; A.S.A. 1947, § 66-5012.