§ 38a-148 — (Formerly Sec. 38-37b). Redemption of shares of domestic insurance company. Notice. Determination of fair value.

Connecticut § 38a-148

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

Text

(a) Any stock of a domestic insurance corporation licensed to conduct an insurance business in this state may be made subject to redemption by that corporation if, in the good faith determination of the corporation's board of directors, any holder of its stock either fails to meet the qualifications prescribed under the laws of this state for licensure of the corporation, or otherwise fails to secure the regulatory approvals required under the laws of this state for ownership of such stock, such determination to be reflected in a resolution adopted by the board. Prior to any such determination, the corporation shall give such holder or holders of stock written warning that such determination may be made. Any stock subject to redemption under this section may be redeemed in cash, property or rights, including securities of the same or another corporation, or any combination thereof, at such time or times, price or prices, or rate or rates, and with such adjustments, as shall be stated in the certificate of incorporation, or in the resolution or resolutions providing for the issuance of such stock adopted by the board of directors, or in the resolution of the board at the time of its determination as provided in this section. A certified copy of the resolution of the board with respect to its determination shall be filed with the Insurance Commissioner within three days of its adoption. Notice, specifying the shares called for redemption, the redemption date, the redemption consideration and the place where the redemption consideration is payable, shall be mailed not less than thirty days before the redemption date, to each holder of stock so called at the holder's address as it appears upon the books of the corporation. If notice of such call has been duly given and if, on or before the redemption date designated in such notice, the consideration necessary for the redemption has been set aside, so as to be and continue to be available therefor, then, notwithstanding that any certificate of the stock so called for redemption shall not have been surrendered for cancellation, (1) the dividends thereon shall cease to accrue from and after the date of redemption so designated, (2) the holder of such shares shall not have the right to receive notice of or to vote such shares at any meeting of the corporation's shareholders or to grant a consent or authorization with respect to the shares, and (3) all other rights with respect to the shares of the stock so called for redemption shall after such redemption date cease and terminate, except the right of the holder to receive the redemption consideration thereof without interest. (b) If, at least ten days prior to the redemption date, such shareholder gives written notice to the corporation objecting to the redemption consideration set forth in the corporation's notice, the fair value for such shareholder's shares shall be determined and such shares shall be acquired by the corporation in the manner set forth in sections 33-863 to 33-872 , inclusive. The right to be paid the value of such shares pursuant to said sections shall be such shareholder's exclusive remedy as holder of such shares against the corporation's redemption of such shares, whether or not the shareholder proceeds as provided in said sections. Such notice by the shareholder shall be deemed to be the notice required by section 33-862 . (c) The provisions of this section relating to stock redemptions shall apply only to shares of a corporation the beneficial ownership of which is acquired after April 3, 1984.

Legislative History

(P.A. 84-13, S. 1, 2; P.A. 96-271, S. 212, 254.) History: Sec. 38-37b transferred to Sec. 38a-148 in 1991; P.A. 96-271 amended Subsec. (b) to replace references to “section 33-374” with “sections 33-863 to 33-872, inclusive” or “said sections”, as appropriate, replace reference to “subsection (b) of said section 33-374” with “section 33-862” and delete provision that deemed the corporation's redemption consideration as set forth in its notice to the shareholder to be the written offer required by Sec. 33-374(d), effective January 1, 1997; (Revisor's note: In 1997 in Subsec. (b) after the phrase “... manner set forth in sections 33-863 to 33-872.” the word “, inclusive” was inserted editorially by the Revisors for consistency with customary statutory usage). Cited. 220 C. 721.