§ 1506 — Acquisition or retention of control of insurers

New York § 1506

• Jurisdiction: New York
• Law ISC: Insurance
• Art. 15: Holding Companies

Text

§ 1506. Acquisition or retention of control of insurers. (a) No\nperson, other than an authorized insurer, shall acquire control of any\ndomestic insurer, whether by purchase of its securities or otherwise,\nunless:\n (1) it gives twenty days written notice to the insurer, or such\nshorter period of notice as the superintendent permits, of its intention\nto acquire control, provided that the notice shall include an agreement\nby the person seeking to acquire control that the person will provide\nthe annual report specified in section one thousand five hundred three\nof this article for so long as control exists; and\n (2) it receives the superintendent's prior approval.\n (b) The superintendent shall disapprove such acquisition if he\ndetermines, after notice and an opportunity to be heard, that such\naction is reasonably necessary to protect the interests of the people of\nthis state. Only the following factors may be considered in making such\ndetermination:\n (1) the financial condition of the acquiring person and the insurer;\n (2) the trustworthiness of the acquiring person or any of its officers\nor directors;\n (3) a plan for the proper and effective conduct of the insurer's\noperations;\n (4) the source of the funds or assets for the acquisition;\n (5) the fairness of any exchange of shares, assets, cash or other\nconsideration for the shares or assets to be received;\n (6) whether the effect of the acquisition may be substantially to\nlessen competition in any line of commerce in insurance or to tend to\ncreate a monopoly therein; and\n (7) whether the acquisition is likely to be hazardous or prejudicial\nto the insurer's policyholders or shareholders.\n (c) (1) The following conditions affecting any controlled insurer,\nregardless of when such control has been acquired, are violations of\nthis article:\n (A) the controlling person or any of its officers or directors have\ndemonstrated untrustworthiness; and\n (B) the effect of retention of control, in the case of a domestic\ncontrolled insurer, may be substantially to lessen competition in any\nline of commerce in insurance or to tend to create a monopoly therein,\nor, in the case of a foreign or alien controlled insurer, may be\nsubstantially to lessen competition in any line of commerce in insurance\nin this state or to tend to create a monopoly therein.\n (2) If, after notice and an opportunity to be heard, the\nsuperintendent determines that any of the foregoing violations exists,\nhe shall issue an order based on written findings and cause the same to\nbe served upon the insurer and all persons affected thereby directing\nany person found to be in violation hereof to take appropriate action to\ncure such violation. Upon the failure of any such person to comply with\nsuch order, section one thousand five hundred ten of this article shall\nbecome applicable.\n (d) The superintendent may require the submission of such information\nas he deems necessary to determine whether any acquisition or retention\nof control complies with this article and may require, as a condition of\napproval of such acquisition or retention of control, that all or any\nportion of such information be disclosed to the insurer's shareholders.\n (e) Unless subject to registration under section one thousand five\nhundred three of this article, or unless acquisition of its control is\nsubject to subsections (a) and (b) hereof, every authorized insurer\nshall, within thirty days after any event requiring notice hereunder,\nnotify the superintendent in writing of the identity of any person whom\nthe insurer then knows or has reason to believe controls, or has taken\nany action, other than preliminary negotiations or discussions, to\nacquire control of the insurer.\n (f) Any holding company seeking to divest its controlling interest in\na domestic insurer, in any manner, shall file with the superintendent,\nwith a copy to the insurer, notice of its proposed divestiture at least\nthirty days prior to the cessation of control, provided, however that\nthis subsection shall not apply if notice is provided as required by\nsubsection (a) of this section.\n