Source: http://www.wvlegislature.gov/bill_status/bills_text.cfm?billdoc=sb253%20intr.htm&yr=2011&sesstype=RS&i=253
Timestamp: 2018-03-22 05:10:33
Document Index: 404433989

Matched Legal Cases: ['§33', '§33', '§33', '§33', '§33', '§33', '§33', '§33', '§33', '§33', '§33', '§33', '§33', '§33']

A BILL to amend and reenact §33-27-2, §33-27-2a, §33-27-3, §33-27-4, §33-27-5, §33-27-6, §33-27-7, §33-27-9, §33-27-11 and §33-27-14 of the Code of West Virginia, 1931, as amended; and to amend said code by adding thereto two new sections, designated §33-27-3a and §33-27-6a, all relating to insurance holding company systems; defining terms; excluding certain investments from determination of adequacy of surplus; requiring notice and other information with regard to divestiture or acquisition of a controlling interest; changing public hearing requirements; providing standards for review of acquisition request by commissioner; establishing process for consolidated hearings; providing standards and procedures for certain acquisitions not otherwise covered; expanding types of information that may be demanded and reviewed by the commissioner; providing for establishment of supervisory colleges; providing additional confidentiality measures; and
(g) “Person” means an individual, a corporation, a limited liability company, a partnership, an association, a joint-stock company, a trust, an unincorporated organization, a depository institution or any other legal similar entity or any combination of the foregoing acting in concert, but does not include any securities broker performing no more than the usual and customary broker’s function and holding less than twenty percent of the voting securities of an insurance company or of any person which controls an insurance company does not include any joint venture partnership exclusively engaged in owning, managing, leasing or developing real or tangible personal property.
(1) Any No person other than the issuer shall not may make a tender offer for or a request or invitation for tenders of, or enter into any agreement to exchange securities for, seek to acquire or acquire, in the open market or otherwise, any voting security of a domestic insurer if, after the consummation thereof, the person would, directly or indirectly (or by conversion or by exercise of any right to acquire) be in control of the insurer and a person shall not enter into an agreement to merge with or otherwise to acquire control of a domestic insurer or any person controlling a domestic insurer unless at the time any such the offer, request or invitation is made or any such the agreement is entered into, or prior to the acquisition of such the securities if no offer or agreement is involved, the person has filed with the commissioner and has sent to the insurer and, to the extent permitted by applicable federal laws, rules and regulations, the insurer has sent to its shareholders a statement containing the information required by this section and the offer, request, invitation, agreement or acquisition has been approved by the commissioner in the manner hereinafter prescribed.
(13) (11) The terms of any agreement, contract or understanding made with any broker-dealer as to solicitation of securities referred to in subsection (a) of this section for tender and the amount of any fees, commissions or other compensation to be paid to broker-dealers with regard thereto; and
(g) (f) (1) Approval by commissioner; hearings. -- The commissioner shall approve any merger or other acquisition of control referred to in subsection (a) of this section unless, after a public hearing thereon, he or she finds that: any of the following conditions exists:
(2) (B) The effect of the merger or other acquisition of control would be substantially to lessen competition in insurance in this state or tend to create a monopoly therein. In applying the competitive standard in this subdivision:
(h) (2) The public hearing required by this section shall be held within forty thirty days after the statement required by subsection (a) of this section is filed, and at least fifteen twenty days' notice thereof shall be given by the commissioner to the person filing the statement. Not less than seven days’ notice of the public hearing shall be given by the person filing the statement to the insurer and to any other persons as may be designated by the commissioner. The insurer shall give notice of the public hearing to its security holders. The commissioner shall make a determination within twenty days after the conclusion of the hearing the sixty-day period preceding the effective date of the proposed transaction. At the hearing, the person filing the statement, the insurer, any person to whom notice of hearing was sent, and any other person whose interest may be affected has the right to present evidence, examine and cross-examine witnesses, and offer oral and written arguments and in connection therewith shall be entitled to conduct discovery proceedings in the same manner as is presently allowed in the circuit courts of this state: Provided, That all discovery proceedings shall be concluded not later than three days prior to the commencement of the public hearing.
(k) (g) Exemptions. –- The provisions of this section shall not apply to any offer, request, invitation, agreement or acquisition which the commissioner by order shall exempt therefrom as: (1) Not having been made or entered into for the purpose of, and not having the effect of, changing or influencing the control of a domestic insurer; or (2) as otherwise not comprehended within the purposes of this section.
(1) “Acquisition” means any agreement, arrangement or activity the consummation of which results in a person acquiring directly or indirectly the control of another person, and includes, but is not limited to, the acquisition of voting securities, the acquisition of assets, bulk reinsurance and mergers.
four percent fourpercent or more
ten percent ten percent
fifteen percent one percent or more
five percent five percent or more
ten percent four percent or more
fifteen percent three percent or more
nineteen percent one percent or more
(2) Any insurer which is subject to registration under this section shall register within sixty days after the effective date of this article or fifteen days after it becomes subject to registration, whichever is later, and annually thereafter by June 1 of each year for the previous calendar year, unless the commissioner for good cause shown extends the time for registration. and then within such extended time. The commissioner may require any authorized insurer which is a member of a holding company system which is not subject to registration under this section to furnish a copy of the registration statement, the summary described in subsection (c) of this section, or other information filed by such insurance company with the insurance regulatory authority of domiciliary jurisdiction.
(b) Information and form required. –- Every insurer subject to registration shall file a registration statement with the commissioner and the national association of insurance commissioners on a form and in a format prescribed by the National Association of Insurance Commissioners, which shall contain the following current information: about:
(f) (e) Reporting of dividends to shareholders. –- Subject to subsection (c), section five of this article, each registered insurer shall report to the commissioner all dividends and other distributions to shareholders within fifteen business days following the declaration thereof.
(j) (i) Alternative registration. –- The commissioner may allow an insurer which is authorized to do business in this state and which is a part of an insurance holding company system to register on behalf of any affiliated insurer which is required to register under subsection (a) of this section and to file all information and material required to be filed under this section.
(l) Enterprise Risk Filing. –- The ultimate controlling person of every insurer subject to registration shall also file an annual enterprise risk report. The report shall, to the best of the ultimate controlling person’s knowledge and belief, identify the material risks within the insurance holding company system that could pose enterprise risk to the insurer. The report shall be filed with the lead state commissioner of the insurance holding company system as determined by the procedures within the Financial Analysis Handbook adopted by the National Association of Insurance Commissioners.
(m) Violations. –- The failure to file a registration statement or any amendment enterprise risk filing thereto required by this section within the time specified for such filing shall be a violation of this section.
(c) Dividends and other distributions. – (1) An insurer subject to registration under section four of this article shall not No domestic insurer may pay any extraordinary dividend or make any other extraordinary distribution to its shareholders until:
(e) (3) Notwithstanding any other provision of law, an insurer may declare an extraordinary dividend or distribution which is conditional upon the commissioner's approval thereof, and such a the declaration shall confer no rights upon shareholders until: (1) (A) The commissioner has approved the payment of such dividend or distribution; or
(A) With respect to nonlife insurers, the lesser of one three percent of the insurer's admitted assets or ten twenty-five percent of surplus as regards policyholders; and
(A) With respect to nonlife insurers, the lesser of one three percent of the insurer's admitted assets or ten twenty-five percent of surplus as regards policyholders; each as of December 31, next preceding;
(B) With respect to life insurers, three percent of the insurer’s admitted assets as of December 31, next preceding;
(5) Guarantees when made by a domestic insurer; Provided, That a guarantee that is quantifiable as to amount is not subject to the notice requirements of this subdivision unless it exceeds the lesser of one half of one percent of the insurer’s admitted assets or ten percent of surplus as regards policyholders as of December 31, next preceding: Provided, however, That all guarantees that are not quantifiable as to amount are subject to the notice requirements of this subdivision.
(6) Direct or indirect acquisitions or investments in a person that controls the insurer or in an affiliate of the insurer in an amount which, together with its present holdings in such investments, exceeds two and one-half percent of the insurer’s surplus to policyholders. Direct or indirect acquisitions or investments in subsidiaries acquired pursuant to section two of this article or authorized under any other section of this chapter, or in nonsubsidiary insurance affiliates that are subject to the provisions of this article, are exempt from this requirement; and
(i) (f) The commissioner, in reviewing transactions pursuant to subsection (f)(d) of this section, shall consider whether the transactions comply with the standards set forth in subsection (a) of this section and whether they may adversely affect the interests of policyholders.
(k) (h) With regard to domestic insurers, the following requirements apply: Management of domestic insurers subject to registration. –- (1) Notwithstanding the control of a domestic insurer by any person, the officers and directors of the insurer shall not thereby be relieved of any obligation or liability to which they would otherwise be subject by law, and the insurer shall be managed so as to assure its separate operating identity consistent with the provisions of this chapter article.
(1) The commissioner may order any insurer registered under section four of this article to produce such records, books or other information papers in the possession of the insurer or its affiliates as shall be are reasonably necessary to ascertain the financial condition or legality of conduct of such insurer. In the event that such insurer fails to comply with such order, the commissioner shall have the power to examine such affiliates to obtain such information determine compliance with this chapter.
(b) Expenses. – Each registered insurer subject to this section is liable for and shall pay the reasonable expenses of the commissioner’s participation in a supervisory college in accordance with subsection (c) of this section, including reasonable travel expenses. For purposes of this section, a supervisory college may be convened as either a temporary or permanent forum for communication and cooperation between the regulators charged with the supervision of the insurer or its affiliates, and the commissioner may establish a regular assessment to the insurer for the payment of these expenses.
(c) Supervisory College. –- In order to assess the business strategy, financial position, legal and regulatory position, risk exposure, risk management and governance processes, and as part of the examination of individual insurers in accordance with section six of this article, the commissioner may participate in a supervisory college with other regulators charged with supervision of the insurer or its affiliates, including other state, federal and international regulatory agencies. The commissioner may enter into agreements in accordance with subsection (c), section seven of this article providing the basis for cooperation between the commissioner and the other regulatory agencies, and the activities of the supervisory college: Provided, That this section may not be construed as delegating to the supervisory college the authority of the commissioner to regulate or supervise the insurer or its affiliates within its jurisdiction.
(a) All information, documents and copies thereof Documents, materials or other information in the possession or control of the commissioner that are obtained by or disclosed to the commissioner or any other person in the course of an examination or investigation made pursuant to section six of this article and all information reported pursuant to subdivision thirteen or fourteen, subsection (b), section three of this article, sections section four and or section five of this article shall be given is confidential treatment and are not subject to subpoena and may not be made public by the commissioner or any other person, except to insurance departments of other states and to the board of Governors of the federal reserve system or other appropriate federal banking agency in accordance with section nineteen, article two of this chapter, by law and privileged, is exempt from disclosure pursuant to chapter twenty-nine-b of this code, is not open to public inspection, is not subject to subpoena, is not subject to discovery or admissible in evidence in any criminal, private civil or administrative action and is not subject to production pursuant to court order: Provided, That the commissioner is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as part of the commissioner’s official duties. The commissioner may not otherwise make the documents, materials or other information public without the prior written consent of the insurer to which it pertains unless the commissioner, after giving the insurer and its affiliates who would be affected thereby notice and opportunity to be heard, determines that the interests of policyholders, shareholders or the public will be served by the publication thereof, in which event he or she may publish all or any part thereof in any manner as he or she may consider appropriate.
(B) Specify that ownership of information shared with the National Association of Insurance Commissioners and its affiliates and subsidiaries pursuant to this article remains with the commissioner, and the National Association of Insurance Commissioners’s use of the information is subject to the direction of the commissioner;
(b) Every director or officer of an insurance holding company system who knowingly violates, participates in, or assents to, or who knowingly permits any of the officers or agents of the insurer to engage in transactions or make investments which have not been properly reported or submitted pursuant to subsection (a), section four of this article and subsections (c) and (d), of section five of this article, or which violate any other provision of this article, shall pay, in his or her individual capacity, a civil forfeiture of not more than $5,000 per violation, after notice and hearing before the commissioner. In determining the amount of the civil forfeiture, the commissioner shall take into account the appropriateness of the forfeiture with respect to the gravity of the violation, the history of previous violations, and such other matters as justice may require.
§33-27-3A and §33-27-6A are new; therefore, strike-throughs and underscoring have been omitted.