250
neither a stock holding company nor the converted
insurer shall award any stock options or stock
grants to persons who are elected officers or direc-
tors of the mutual holding company, the stock hold-
ing company, or the converted insurer, except with
respect to any such awards or options to which a
person is entitled as a policyholder and as approved
by the State insurance regulator of the transferee
domicile.
(4) CONTRACTUAL RIGHTS.—Upon reorganiza-
tion into a mutual holding company, the contractual
rights of the policyholders are preserved.
(5) FAIR AND EQUITABLE TREATMENT OF POL-
ICYHOLDERS.—The reorganization is approved as
fair and equitable to the policyholders by the insur-
ance regulator of the transferee domicile.
SEC. 313. EFFECT ON STATE LAWS RESTRICTING REDOMES-
TICATION.
(a) IN GENERAL.—Unless otherwise permitted by
this subtitle, State laws of any transferor domicile that
conflict with the purposes and intent of this subtitle are
preempted, including but not limited to—
(1) any law that has the purpose or effect of
impeding the activities of, taking any action against,
or applying any provision of law or regulation to,
251
any insurer or an affiliate of such insurer because
that insurer or any affiliate plans to redomesticate,
or has redomesticated, pursuant to this subtitle;
(2) any law that has the purpose or effect of
impeding the activities of, taking action against, or
applying any provision of law or regulation to, any
insured or any insurance licensee or other inter-
mediary because such person or entity has procured
insurance from or placed insurance with any insurer
or affiliate of such insurer that plans to redomes-
ticate, or has redomesticated, pursuant to this sub-
title, but only to the extent that such law would
treat such insured licensee or other intermediary dif-
ferently than if the person or entity procured insur-
ance from, or placed insurance with, an insured li-
censee or other intermediary which had not redomes-
ticated;
(3) any law that has the purpose or effect of
terminating, because of the redomestication of a mu-
tual insurer pursuant to this subtitle, any certificate
of authority, agent appointment or license, rate ap-
proval, or other approval, of any State insurance
regulator or other State authority in existence imme-
diately prior to the redomestication in any State
other than the transferee domicile.
252
(b) DIFFERENTIAL TREATMENT PROHIBITED.—No
State law, regulation, interpretation, or functional equiva-
lent thereof, of a State other than a transferee domicile
may treat a redomesticating or redomesticated insurer or
any affiliate thereof any differently than an insurer oper-
ating in that State that is not a redomesticating or re-
domesticated insurer.
(c) LAWS PROHIBITING OPERATIONS.—If any li-
censed State fails to issue, delays the issuance of, or seeks
to revoke an original or renewal certificate of authority
of a redomesticated insurer immediately following re-
domestication, except on grounds and in a manner consist-
ent with its past practices regarding the issuance of cer-
tificates of authority to foreign insurers that are not re-
domesticating, then the redomesticating insurer shall be
exempt from any State law of the licensed State to the
extent that such State law or the operation of such State
law would make unlawful, or regulate, directly or indi-
rectly, the operation of the redomesticated insurer, except
that such licensed State may require the redomesticated
insurer to—
(1) comply with the unfair claim settlement
practices law of the licensed State;
(2) pay, on a nondiscriminatory basis, applica-
ble premium and other taxes which are levied on li-
253
censed insurers or policyholders under the laws of
the licensed State;
(3) register with and designate the State insur-
ance regulator as its agent solely for the purpose of
receiving service of legal documents or process;
(4) submit to an examination by the State in-
surance regulator in any licensed state in which the
redomesticated insurer is doing business to deter-
mine the insurer’s financial condition, if—
(A) the State insurance regulator of the
transferee domicile has not begun an examina-
tion of the redomesticated insurer and has not
scheduled such an examination to begin before
the end of the 1-year period beginning on the
date of the redomestication; and
(B) any such examination is coordinated to
avoid unjustified duplication and repetition;
(5) comply with a lawful order issued in—
(A) a delinquency proceeding commenced
by the State insurance regulator of any licensed
State if there has been a judicial finding of fi-
nancial impairment under paragraph (7); or
(B) a voluntary dissolution proceeding;
(6) comply with any State law regarding decep-
tive, false, or fraudulent acts or practices, except
254
that if the licensed State seeks an injunction regard-
ing the conduct described in this paragraph, such in-
junction must be obtained from a court of competent
jurisdiction as provided in section 314(a);
(7) comply with an injunction issued by a court
of competent jurisdiction, upon a petition by the
State insurance regulator alleging that the redomes-
ticating insurer is in hazardous financial condition
or is financially impaired;
(8)
participate
in
any
insurance
insolvency
guaranty association on the same basis as any other
insurer licensed in the licensed State; and
(9) require a person acting, or offering to act,
as an insurance licensee for a redomesticated insurer
in the licensed State to obtain a license from that
State, except that such State may not impose any
qualification
or
requirement
that
discriminates
against a nonresident insurance licensee.
SEC. 314. OTHER PROVISIONS.
(a) JUDICIAL REVIEW.—The appropriate United
States district court shall have exclusive jurisdiction over
litigation arising under this section involving any redomes-
ticating or redomesticated insurer.
(b) SEVERABILITY.—If any provision of this section,
or the application thereof to any person or circumstances,
361
but not any requirement to file an application to acquire
a bank pursuant to section 3.’’.
(b) DIVESTITURE PROCEDURES.—Section 5(e)(1) of
the Bank Holding Company Act of 1956 (12 U.S.C.
1844(e)(1)) is amended—
(1) by striking ‘‘Financial Institutions Super-
visory Act of 1966, order’’ and inserting ‘‘Financial
Institutions Supervisory Act of 1966, at the election
of the bank holding company—
‘‘(A) order’’; and
(2) by striking ‘‘shareholders of the bank holding
company. Such distribution’’ and inserting ‘‘share-
holders of the bank holding company; or
‘‘(B) order the bank holding company, after due
notice and opportunity for hearing, and after con-
sultation with the primary supervisor for the bank,
which shall be the Comptroller of the Currency in the
case of a national bank, and the Federal Deposit In-
surance Corporation and the appropriate State super-
visor in the case of an insured nonmember bank, to
terminate (within 120 days or such longer period as
the Board may direct) the ownership or control of
any such bank by such company.
‘‘The distribution referred to in subparagraph (A)’’.