V.I. Code tit. 22, § 324 (2019)
2019 US Virgin Islands Code|Title 22 - Insurance|Chapter 14 - Virgin Islands Insurance Holding Company System Regulation|§ 324. Acquisitions involving insurers not otherwise covered

 (a) The following definitions apply for the purposes of this section only: (1) “Acquisition” means any agreement, arrangement or activity the consummation of which results in a person’s 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. (2) An “involved insurer” includes an insurer that either acquires or is acquired, is affiliated with an acquirer or an acquired insurer, or is the result of a merger. (b)  (1) Except as exempted in paragraph (2) of this subsection, this section applies to any acquisition in which there is a change in control of an insurer authorized to do business in the Territory. (2) This section does not apply to the following: (A) A purchase of securities solely for investment purposes so long as the securities are not used by voting or otherwise to cause or attempt to cause the substantial lessening of competition in any insurance market in the Territory. If a purchase of securities results in a presumption of control under section 321(c), it is not solely for investment purposes unless the commissioner of the insurer’s state of domicile accepts a disclaimer of control or affirmatively finds that control does not exist and the disclaimer action or affirmative finding is communicated by the domiciliary commissioner to the Commissioner. (B) The acquisition of a person by another person when both persons are neither directly nor through affiliates primarily engaged in the business of insurance, if pre-acquisition notification is filed with the Commissioner in accordance with subsection (c)(1) 30 days before to the proposed effective date of the acquisition. However, such pre-acquisition notification is not required for exclusion from this section if the acquisition would otherwise be excluded from this section by any other subparagraph of paragraph (2). (C) The acquisition of already affiliated persons. (D) An acquisition if, as an immediate result of the acquisition: (i) In no market would the combined market share of the involved insurers exceed five percent of the total market. (ii) There would be no increase in any market share, or (iii) In no market would: (I) The combined market share of the involved insurers exceed 12 percent of the total market, and (II) The market share increases by more than two percent of the total market. For the purpose of paragraph (2)(D), a market means direct written insurance premium in the Territory for a line of business as contained in the annual statement required to be filed by insurers licensed to do business in the Territory; (E) An acquisition for which a pre-acquisition notification is required pursuant to this section due solely to the resulting effect on the ocean marine insurance line of business; (F) An acquisition of an insurer whose domiciliary commissioner affirmatively finds that the insurer is in failing condition; there is a lack of feasible alternative to improving such condition; the public benefits of improving the insurer’s condition through the acquisition exceed the public benefits that would arise from not lessening competition; and the findings are communicated by the domiciliary commissioner to the Commissioner. (c) An acquisition covered by subsection (b) may be subject to an order pursuant to subsection (c) unless the acquiring person files a pre-acquisition notification and the waiting period has expired. The acquired person may file a pre-acquisition notification. The Commissioner shall give confidential treatment to information submitted under this section in the same manner as provided in section 330. (1) The pre-acquisition notification must be in the form and contain information as prescribed by the NAIC relating to those markets which, under subsection (b)(2)(D), cause the acquisition not to be exempted from the provisions of this section. The Commissioner may require such additional material and information as considered necessary to determine whether the proposed acquisition, if consummated, would violate the competitive standard of subsection (d). The required information may include an opinion of an economist as to the competitive impact of the acquisition in the Virgin Islands accompanied by a summary of the education and experience of the person indicating the person’s ability to render an informed opinion. (2) The waiting period required begins on the date of receipt by the Commissioner of a pre-acquisition notification and ends on the earlier of the thirtieth day after the date of receipt, or termination of the waiting period by the Commissioner. Before the end of the waiting period, the Commissioner on a one-time basis may require the submission of additional needed information relevant to the proposed acquisition, if the waiting period ends on the earlier of the thirtieth day after receipt of the additional information by the Commissioner or termination of the waiting period by the Commissioner. (d)  (1) The Commissioner may enter an order under subsection (e)(1) with respect to an acquisition if there is substantial evidence that the effect of the acquisition may be substantially to lessen competition in any line of insurance in the territory or tend to create a monopoly or if the insurer fails to file adequate information in compliance with subsection (c). (2) In determining whether a proposed acquisition would violate the competitive standard of paragraph (d)(1), the Commissioner shall consider the following: (A) Any acquisition covered under subsection (b) involving two or more insurers competing in the same market is prima facie evidence of violation of the competitive standards. (i) If the market is highly concentrated and the involved insurers possess the following shares of the market:Insurer AInsurer B4%4% or more10%2% or more15%1% more   (ii) Or, if the market is not highly concentrated and the involved insurers possess the following shares of the market:Insurer AInsurer B5%5% or more10%4% or more15%3% or more19%1% or more   (iii) A highly concentrated market is one in which the share of the four largest insurers is 75 percent or more of the market. Percentages not shown in the tables are interpolated proportionately to the percentages that are shown. If more than two insurers are involved, exceeding the total of the two columns in the table is prima facie evidence of violation of the competitive standard in paragraph (1) of this subsection. For the purpose of this item, the insurer with the largest share of the market is deemed to be Insurer A. (B) There is a significant trend toward increased concentration when the aggregate market share of any grouping of the largest insurers in the market, from the two largest to the eight largest, has increased by seven percent or more of the market over a period of time extending from any base year five to ten years before to the acquisition up to the time of the acquisition. Any acquisition or merger covered under subsection (b) involving two or more insurers competing in the same market is prima facie evidence of violation of the competitive standard in paragraph (1) if: (i) There is a significant trend toward increased concentration in the market; (ii) One of the insurers involved is one of the insurers in a grouping of large insurers showing the requisite increase in the market share; and (iii) Another involved insurer’s market is two percent or more. (C) For the purposes of paragraph (2) of this subsection: (i) The term “insurer” includes any company or group of companies under common management, ownership or control; (ii) The term “market” means the relevant product and geographical markets. In determining the relevant product and geographical markets, the Commissioner shall give due consideration to, among other things, the definitions or guidelines, if any, promulgated by the NAIC and to information, if any, submitted by parties to the acquisition. In the absence of sufficient information to the contrary, the relevant product market is assumed to be the direct written insurance premium for a line of business, such line being that used in the annual statement required to be filed by insurers doing business in the Territory, and the relevant geographical market is assumed to be the Territory. (iii) The burden of showing prima facie evidence of violation of the competitive standard rests upon the Commissioner. (D) Even though an acquisition is not prima facie violative of the competitive standard under subparagraph (A) and (B), the Commissioner may establish the requisite anticompetitive effect based upon other substantial evidence. Even though an acquisition is prima facie violative of the competitive standard under subparagraph (A) and (B), a party may establish the absence of the requisite anticompetitive effect based upon other substantial evidence. Relevant factors in making a determination under this section include, but are not limited to, the following: market shares, volatility of ranking of market leaders, number of competitors, concentration, trend of concentration in the industry, and ease of entry and exit into the market. (3) An order may not be entered under subsection (e)(1) if: (A) The acquisition will yield substantial economies of scale or economies in resource utilization that cannot be feasibly achieved in any other way, and the public benefits which would arise from such economies exceed the public benefits which would arise from not lessening competition; or (B) The acquisition will substantially increase the availability of insurance, and the public benefits of the increase exceed the public benefits which would arise from not lessening competition. (e)  (1)  (A) If an acquisition violates the standards of this section, the Commissioner may enter an order: (i) requiring an involved insurer to cease and desist from doing business in the Territory with respect to the line or lines of insurance involved in the violation; or (ii) imposing a reasonable monetary penalty, including any fees, costs and expenses associated with the hearing as allowed pursuant to this chapter; or (iii) denying the application of an acquired or acquiring insurer for a license to do business in the Territory. (B) The order may not be entered unless: (i) there is a hearing; (ii) notice of the hearing is issued before the end of the waiting period and not less than 15 days before the hearing; and (iii) the hearing is concluded and the order is issued no later than 60 days after the date of the filing of the pre-acquisition notification with the Commissioner. (C) Every order must be accompanied by a written decision of the Commissioner setting forth findings of fact and conclusions of law. (D) An order pursuant to this subsection may not apply if the acquisition is not consummated. (2) Any person who violates a cease and desist order of the Commissioner issued under paragraph (1) and while the order is in effect may, after notice and hearing and upon order of the Commissioner, be subject at the discretion of the Commissioner to one or more of the following: (A) a monetary penalty of at least $1,000 for every day of violation; or (B) suspension or revocation of the person’s license. (3) Any insurer or other person who fails to make any filing required by this section and who also fails to demonstrate a good faith effort to comply with any filing requirement, is subject to a fine of not less than $25,000. (f) Sections 335(b), 335(c), and 337 do not apply to acquisitions covered under subsection (b) of this section.