§ 38a-132 — (Formerly Sec. 38-39d). Approval of acquisitions. Hearing. Expenses.

Connecticut § 38a-132

• Jurisdiction: Connecticut
• Title 38a: Insurance
• Ch. 698: Insurers

Text

(a) The commissioner shall approve any merger or other acquisition of control referred to in subsection (a) of section 38a-130 unless, after a public hearing, the commissioner finds that: (1) After the change of control, the domestic insurance company referred to in subsection (a) of section 38a-130 would not be able to satisfy the requirements for the issuance of a license to write the line or lines of business for which it is presently licensed; (2) (A) The effect of the merger or other acquisition of control would be to substantially lessen competition of insurance in this state or tend to create a monopoly herein. The commissioner shall consider the information required under subdivision (1) of subsection (c) of section 38a-131 and the considerations specified in subdivision (1) of subsection (d) of section 38a-131 in evaluating the effect of the merger or other acquisition of control on competition in this state. (B) The commissioner shall not disapprove the merger or other acquisition of control on the basis of subparagraph (A) of this subdivision if the commissioner finds that a situation as described in subdivision (2) of subsection (e) of section 38a-131 exists. (C) The commissioner may condition the approval of the merger or other acquisition of control on the correction or removal, within a specified period of time, of the basis of the commissioner's disapproval under subparagraph (A) of this subdivision; (3) The financial condition of any acquiring party is such as might jeopardize the financial stability of the insurance company or prejudice the interests of its policyholders; (4) The plans or proposals of the acquiring party to liquidate the insurance company, sell such insurance company's assets or consolidate or merge such insurance company with any person, or to make any other material change in its business or corporate structure or management, are unfair and unreasonable to policyholders of the insurance company and not in the public interest; (5) The competence, experience and integrity of those persons who would control the operation of the insurance company are such that it would not be in the interest of policyholders of the insurance company and of the public to permit the merger or other acquisition of control; or (6) The acquisition is likely to be hazardous or prejudicial to those buying insurance. (b) (1) Any public hearing held by the commissioner pursuant to subsection (a) of this section shall be held not later than thirty days after the statement required by section 38a-130 is filed with the commissioner. The commissioner shall provide at least twenty days' notice of such hearing to the person filing the statement. The person filing the statement shall (A) provide at least seven days' notice of such public hearing to the insurance company and to such other persons as may be designated by the commissioner, (B) publish, in a manner prescribed by the commissioner, notice of such hearing in a newspaper of general circulation in the city of Hartford and in such other municipality as the commissioner may direct, and (C) provide notice in such other manner as the commissioner deems appropriate under the circumstances. If any amendment to the statement is filed, the commissioner may postpone the public hearing for a reasonable period not to exceed thirty days after the filing of such amendment. (2) The person filing the statement, the insurance company, any person to whom notice of hearing was sent and any other person whose interest may be affected shall have the right at the hearing to present evidence, have counsel, examine and cross-examine witnesses and offer oral and written argument; and in connection therewith shall be entitled to conduct discovery proceedings in the same manner as is prescribed by the rules for the Superior Court. All discovery proceedings shall be concluded not later than three days prior to the commencement of the public hearing. (3) If a proposed merger or other acquisition of control under section 38a-130 requires the approval of any other insurance regulatory official of another state, a public hearing may be held on a consolidated basis at the discretion of the commissioner. Such hearing shall be held within the United States before the insurance regulatory officials of the states in which the insurance companies are domiciled, who shall hear and receive evidence. An insurance regulatory official may attend such hearing in person or by telecommunication. (4) The commissioner shall make a determination not later than thirty days after the conclusion of the hearing whether to approve such merger or other acquisition of control. If there will be a change of control of a domestic insurance company, the commissioner shall additionally make a determination not later than thirty days after the conclusion of the hearing whether the acquiring party shall be required to maintain or restore such insurance company's capital to the level required under this title. (c) All expenses incurred by the commissioner in connection with the proceedings under this section, including expenses for the services of any attorneys, actuaries, accountants and other experts not otherwise a part of the commissioner's staff as may be reasonably necessary to assist the commissioner in reviewing the proposed merger or other acquisition of control shall be paid by the person filing the statement required by section 38a-130 .

Legislative History

(1969, P.A. 444, S. 4; P.A. 75-289; P.A. 78-331, S. 17, 58; P.A. 85-16, S. 3, 6; P.A. 92-112, S. 15, 35; P.A. 12-103, S. 4; P.A. 13-134, S. 6; P.A. 17-15, S. 8.) History: P.A. 75-289 added Subsec. (c) re payment of commissioner's expenses; P.A. 78-331 substituted reference to Sec. 38-39b for reference to Sec. 38-39c in Subsec. (a); P.A. 85-16 inserted new Subsec. (c) to permit the commissioner to conduct public hearings to review the acquisition of control of any corporation which controls a domestic insurance company, and to establish standards for the commissioner's determination as to whether the acquisition is prejudicial to the interests of policyholders, relettering former Subsec. (c) as (d); Sec. 38-39d transferred to Sec. 38a-132 in 1991; P.A. 92-112 amended Subsec. (a) to change the time limitation from 180 days to 30 days for the commissioner to hold a public hearing after the statement required under Sec. 38a-130 has been submitted, divided the section into Subdivs., amended the public hearing procedure held to review the acquisition of control of any corporation which controls a domestic insurance company, created new Subdiv. (2) with language taken from old Subsec. (a) re right to present evidence, have counsel, examine and cross-examine witnesses in the public hearing, added a provision requiring that all discovery be completed 3 days prior to the public hearing, added new Subdiv. (3) allowing the commissioner to engage the services of various professionals at the acquiring person's expense, deleted former Subsecs. (b) and (c), added new Subsec. (b) re commissioner's grant of approval of a merger or acquisition based on the public hearing findings and relettered the previous Subsec. (d) accordingly; P.A. 12-103 deleted former Subsec. (a) re public hearing for approval of an acquisition, redesignated existing Subsec. (b)(1) as Subsec. (a) and amended same by redesignating existing Subparas. (A) and (C) to (F) as Subdivs. (1) and (3) to (6), redesignating existing Subpara. (B) as Subdiv. (2)(A) and adding provision therein re considerations by commissioner in evaluating effect of a merger or acquisition, and adding Subdiv. (2)(B) and (C) re disapproval and condition on approval of an acquisition, deleted former Subsec. (b)(2) re “other acquisition of control”, added new Subsec. (b) re requirements for public hearing held on an acquisition, amended Subsec. (c) to add provision re expenses for services of attorneys, actuaries, accountants and other experts, and made technical changes; P.A. 13-134 made technical changes in Subsec. (a)(2); P.A. 17-15 amended Subsec. (b)(1) to delete “subdivision (1) of” re Subsec. (a). Annotations to former section 38-39d: Cited. 166 C. 43; 184 C. 352.