§ 1218 — Regulation of stock ownership, interlocking directors and common management

§ 1218. Regulation of stock ownership, interlocking directors and\ncommon management. (a) Any domestic insurer and any foreign or alien\ninsurer authorized to do business in this state may retain, invest in or\nacquire all or any shares, or, by contract of reinsurance or otherwise,\nacquire the whole or a substantial part of the assets, of any other\ninsurer, or have a common management with any other insurer, unless such\nretention, investment, acquisition or common management is inconsistent\nwith any other provision of this chapter or unless the effect thereof:\n (1) in the case of a domestic or alien insurer, may be substantially\nto lessen competition in any line of commerce in insurance in any\nsection of the country or to tend to create a monopoly therein, or\n (2) in the case of a foreign insurer, may be substantially to lessen\ncompetition in any line of commerce in insurance in this state or to\ntend to create a monopoly therein.\n (b) No person shall serve as a director of two or more insurers under\nthis chapter which are or during the next preceding two years have been\nengaged in writing directly the same lines of commerce in insurance\nunless such interlocking directorate is not used as a means to\nsubstantially lessen competition generally in the business of insurance\nor create a monopoly therein, but any person otherwise qualified may be\na director of two or more insurers having a common ownership or\nmanagement which is not otherwise proscribed if such interlocking\ndirectorate is not used as a means of substantially lessening\ncompetition generally in the business of insurance or of creating a\nmonopoly therein.\n (c) (1) Whenever the superintendent believes this section is being\nviolated, the superintendent shall serve upon the insurer or insurers\nand the director or directors, as the case may be, a notice pursuant to\nsection three hundred four of the financial services law of a hearing\nbefore the superintendent to be held not less than thirty days after\nsuch service and requiring such insurer or insurers and such director or\ndirectors, as the case may be, to show cause why an order should not be\nmade by the superintendent directing such insurer or insurers and such\ndirector or directors, as the case may be, to cease and desist from such\nviolation.\n (2) If, upon such hearing, the superintendent finds a violation of\nthis section he shall issue and cause to be served upon each such\ninsurer or insurers and such director or directors, as the case may be,\nan order reciting the facts found by him, and setting forth the respects\nin which there has been a violation, and directing such insurer or\ninsurers and such director or directors, as the case may be, to cease\nand desist from such violation and he may in such order direct each such\ninsurer to divest itself of the shares or assets held or to rid itself\nof the directors serving contrary to the provisions of subsection (a) or\n(b) of this section.\n (3) A violation of any such cease and desist order shall, subject to\njudicial review, be deemed a violation of this chapter.\n (4) The attorney general may maintain a proceeding upon his own\ninformation to prevent and restrain violations of this section and the\njudgment therein against any defendant may grant affirmative relief to\nthe same extent as may the superintendent by an order issued pursuant to\nthis section.\n (5) Any person, firm, corporation or association shall be entitled to\nmaintain a proceeding to obtain injunctive relief against loss or\ndamages by a violation of this section at whatever time and under the\nsame conditions and principles as when injunctive relief against conduct\nthat will cause loss or damage is granted by the courts under the laws\nof this state governing such proceedings. In such proceeding, the\nplaintiff also may recover the damages sustained by him and the cost of\nsuit, including a reasonable attorney's fee.\n (d) Nothing contained in this section shall be deemed to alter or\nabridge any rights or remedies otherwise available to any person, the\nsuperintendent and the attorney general under any law of this state.\n