§ 31A-16-110 — Enjoining violations -- Voting securities acquired in violation of law or rule.

Utah § 31A-16-110

• Jurisdiction: Utah
• Title 31A: Insurance Code
• Ch. 31A-16: Insurance Holding Companies

Text

(1) (1)(a) Whenever it appears to the commissioner that any insurer or any director, officer, employee, or agent of an insurer has committed or is about to commit a violation of this chapter or any rule or order issued by the commissioner under this chapter, the commissioner may petition a court for an order enjoining the insurer or a director, officer, employee, or agent of the insurer from the violation.
(1)(b) The commissioner may also request other equitable relief which the nature of the case and the interest of the insurer's policyholders, creditors, and shareholders or the public require.
(2) (2)(a) 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 chapter or any rule or order issued by the commissioner under this chapter, may be voted at any shareholders' meeting, or may be counted for quorum purposes.
(2)(b) Any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though those securities were not issued and outstanding.
(2)(c) However, no action taken at that shareholders' meeting is invalidated by the voting of those securities, unless the action would materially affect control of the insurer or unless the court has ordered that voting invalidates the action.
(2)(d) 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 chapter or any rule or order issued by the commissioner under this chapter, the insurer or the commissioner may petition a court to enjoin any offer, request, invitation, or agreement of acquisition which is made in contravention of Section 31A-16-103 or any rule or order issued by the commissioner under this chapter to enjoin the voting of that acquired security.
(2)(e) On a petition under Subsection (2)(d), a court may:
(2)(e)(i) void any vote of that security if the vote has already been cast at any meeting of shareholders; and
(2)(e)(ii) grant other equitable relief which the nature of the case and the interests of the insurer's policyholders, creditors, and shareholders or the public require.
(3) (3)(a) If a person has acquired or is proposing to acquire any voting securities in violation of this chapter or in violation of a rule or order issued by the commissioner under this chapter, the insurer or the commissioner may petition a court with jurisdiction under Title 78A, Judiciary and Judicial Administration.
(3)(b) If a petition is filed under Subsection (3)(a), a court may:
(3)(b)(i) seize or sequester any voting securities of the insurer owned directly or indirectly by that person; and
(3)(b)(ii) issue orders with respect to that person and those securities which the court considers appropriate to effectuate the provisions of this chapter.
(3)(c) A petitioner under Subsection (3)(a) shall provide notice that the court deems appropriate.
(4) For the purposes of this chapter, the situs of the ownership of the securities of domestic insurers is considered to be in this state.

Legislative History

Amended by Chapter 401, 2023 General Session