V.I. Code tit. 22, § 323 (2019)
2019 US Virgin Islands Code|Title 22 - Insurance|Chapter 14 - Virgin Islands Insurance Holding Company System Regulation|§ 323. Acquisition of control of or merger with domestic insurer

 (a)  (1) No person other than the issuer 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, such person would, directly or indirectly or by conversion or by exercise of any right to acquires, be in control of the insurer, and no person may 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 the offer, request or invitation is made or the agreement is entered into, or prior to the acquisition of the securities if no offer or agreement is involved, such person has filed with the Commissioner and has sent to the insurer, 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 prescribed in this chapter. (2) For purposes of this section, any controlling person of a domestic insurer seeking to divest its controlling interest in the domestic insurer, in any manner, shall file with the Commissioner, with a copy to the insurer, confidential notice of its proposed divestiture at least 30 days prior to the cessation of control. The Commissioner shall determine those instances in which the party seeking to divest or to acquire a controlling interest in an insurer, is required to file for and obtain approval of the transaction. The information remains confidential until the conclusion of the transaction unless the Commissioner, in the Commissioner’s discretion determines that confidential treatment will interfere with enforcement of this section. If the statement referred to in paragraph (1) is otherwise filed, this paragraph does not apply. (3) With respect to a transaction subject to this section, the acquiring person must also file a pre-acquisition notification with the Commissioner, which must contain the information set forth in section 324(c)(1). A failure to file the notification subjects the person to penalties specified in section 324(e)(3) of this chapter. (4) For purposes of this section, a domestic insurer includes any person controlling a domestic insurer unless the person, as determined by the Commissioner, is either directly or through its affiliates primarily engaged in business other than the business of insurance. For the purposes of this section, “person” does not include any securities broker holding, in the usual and customary broker’s function, less than 20 percent of the voting securities of an insurance company or of any person which controls an insurance company. (b) The statement to be filed with the Commissioner must be made under oath or affirmation and must contain the following: (1) the name and address of each person by whom or on whose behalf the merger or other acquisition of control referred to subsection (a) is effected hereinafter called the “acquiring party”, and (A) if the person is an individual, the principal occupation and all offices and positions held during the past five years, and any conviction of crimes other than minor traffic violations during the past 10 years; (B) if the person is not an individual, a report of the nature of its business operations during the past five years or for the lesser period as the person and any predecessors are in existence; an informative description of the business intended to be done by the person and the person’s subsidiaries; and a list of all individuals who are directors or executive officers or who are selected to become directors or executive officers of the person, or who perform or will perform functions appropriate to such positions. The list must include for each individual the information required by subsection (b)(1)(A); (2) the source, nature and amount of the consideration used or to be used in effecting the merger or other acquisition of control, a description of any transaction where funds were or are to be obtained for any such purpose, including any pledge of the insurer’s stock, or the stock of any of its subsidiaries or controlling affiliates, and the identity of persons furnishing consideration: where a source of consideration is a loan made in the lender’s ordinary course of business, the identity of the lender remains confidential, if the person filing the statement so requests; (3) fully audited financial information regarding the earnings and financial condition of each acquiring party for the preceding five fiscal years of each acquiring party or for such lesser period as the acquiring party and any predecessors are in existence, and similar unaudited information as of a date not earlier than 90 days prior to the filing of the statement; (4) any plans or proposals which each acquiring party may have to liquidate the insurer, to sell its assets or merge or consolidate it with any person, or to make any other material change in its business or corporate structure or management; (5) the number of shares of any security referred to in subsection (a) which each acquiring party proposes to acquire, and the terms of the offer, request, invitation, agreement or acquisition referred to in subsection (a), and a statement as to the method by which the fairness of the proposal was arrived at; (6) the amount of each class of any security referred to in subsection (a) which is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party; (7) a full description of any contracts, arrangements or understandings with respect to any security referred to in subsection (a) in which any acquiring party is involved, including but not limited to transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. The description must identify the persons with whom the contracts, arrangements or understandings have been entered into; (8) a description of the purchase of any security referred to in subsection (a) during the 12 calendar months before the filing of the statement by any acquiring party, including the dates of purchase, names of the purchasers and consideration paid or agreed to be paid; (9) a description of any recommendations to purchase any security referred to in subsection (a) made during the 12 calendar months preceding the filing of the statement by any acquiring party, or by anyone based upon interviews or at the suggestion of the acquiring party; (10) copies of all tender offers for, requests, or invitations for tenders of, exchange offers for, and agreements to acquire or exchange any securities referred to in subsection (a), and, if distributed, of additional soliciting material relating to them; (11) the term of any agreement, contract or understanding made with or proposed to be made with any broker-dealer as to solicitation of securities referred to in subsection (a) for tender, and the amount of any fees, commissions or other compensation to be paid to broker-dealers with regard thereto; (12) an agreement by the person required to file the statement referred to in subsection (a) that it will provide the annual report, specified in section 325(l), for so long as control exists. The insurer may alternatively file the most recently filed parent corporation reports that have been filed with the Security Exchange Commission, if appropriate; (13) an acknowledgement by the person required to file the statement referred to in subsection (a) that the person and all subsidiaries within its control in the insurance holding company system will provide information to the Commissioner upon request as necessary to evaluate enterprise risk to the insurer. The insurer may alternatively file most recently filed parent corporation reports that have been filed with the SEC, if appropriate; and (14) such additional information as the Commissioner may by rule prescribe as necessary or appropriate for the protection of policyholders of the insurer or in the public interest. (c) If the person required to file the statement referred to in subsection (a) is a partnership, limited partnership, syndicate or other group, the Commissioner may require that the information required under subsection (b), paragraphs (1) through (14) be provided for each partner of the partnership or limited partnership, each member of the syndicate or group, and each person who controls the partner or member. If any partner, member or person is a corporation or the person required to file the statement referred to in subsection (a) is a corporation, the Commissioner may require that the information required under subsection (b), paragraphs (1) through (14) be provided with respect to the corporation, each officer and director of the corporation, and each person who is directly or indirectly the beneficial owner of more than 10 percent of the outstanding voting securities of the corporation. (d) If there are any material changes to the facts set forth in the statement filed with the Commissioner and sent to the insurer pursuant to this section, an amendment setting forth the change, together with copies of all documents and other material relevant to the change, must be filed with the Commissioner and sent to the insurer within two business days after the person learns of the change. (e) If any offer, request, invitation, agreement or acquisition referred to in subsection (a) is proposed to be made by means of a registration statement under the Securities Act of 1933, 15 U.S.C. § 77a et seq., or in circumstances requiring the disclosure of similar information under the Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq., as amended, or under a state law requiring similar registration or disclosure, the person required to file the statement referred to in subsection (a) may use the documents in furnishing the information called for by that statement. (f)  (1) The Commissioner shall approve any merger or other acquisition of control referred to in subsection (a) unless, after a public hearing, the Commissioner finds that: (A) After the change of control, the domestic insurer referred to in subsection (a) may not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed; (B) The effect of the merger or other acquisition of control would substantially lessen competition in insurance in this Territory or tend to create a monopoly. In applying the competitive standard in this subparagraph: (i) The informational requirements of section 324(c)(1) and the standards of section 324(d)(2) apply; (ii) The merger or other acquisition may not be disapproved if the Commissioner finds that any of the situations meeting the criteria provided by section 324(d)(3) exist; and (iii) The Commissioner may condition the approval of the merger or other acquisition on the removal of the basis of disapproval within a specified period of time; (C) The financial condition of any acquiring party is such as may jeopardize the financial stability of the insurer, or prejudice the interest of its policyholders; (D) The plans or proposals that the acquiring party has to liquidate the insurer, sell its assets or consolidate or merge it with any person, or to make any other material change in its business or corporate structure or management, are unfair and unreasonable to policyholders of the insurer and not in the public interest; (E) The competence, experience and integrity of those persons who controls the operation of the insurer are such that it is not in the interest of policyholders of the insurer and of the public to permit the merger or other acquisition of control; or (F) The acquisition is likely to be hazardous or prejudicial to the insurance-buying public. (2) The public hearing referred to in subsection (f)(1) must be held not later than 30 days after the statement required by subsection (a) is filed, and at least 20 days’ notice must be given by the Commissioner to the person filing the statement. Not less than seven days’ notice of the public hearing must be given by the person filing the statement to the insurer and to such other persons as may be designated by the Commissioner. The Commissioner shall make a determination within the 60-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, or 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 with the hearing, is entitled to conduct discovery proceedings in the same manner as is presently allowed in the appropriate court of the Virgin Islands. All discovery proceedings must be concluded not later than three days prior to the commencement of the public hearing. (3) If the proposed acquisition of control will require the approval of more than one Commissioner, the public hearing referred to in subsection (f) may be held on a consolidated basis upon request of the person filing the statement referred to in subsection (a). The person shall file the statement referred to in subsection (a) with the NAIC within five days of making the request for a public hearing. A Commissioner may opt out of a consolidated hearing, and shall provide notice to the applicant of the opt-out within 10 days of the receipt of the statement referred to in subsection (a). A hearing conducted on a consolidated basis must be public and must be held within the United States before the commissioners of the states in which the insurers are domiciled. The Commissioners shall hear and receive evidence. A commissioner may attend such hearing, in person or by telecommunication. (4) In connection with a change of control of a domestic insurer, any determination by the Commissioner that the person acquiring control of the insurer is required to maintain or restore the capital of the insurer to the level required by the laws and regulations of the Virgin Islands must be made not later than 60 days after the date of notification of the change in control submitted pursuant to subsection (a)(1). (5) The Commissioner may hire at the acquiring person’s expense any attorneys, actuaries, accountants and other experts not otherwise a part of the Commissioner’s staff as may be reasonably necessary to assist the Commissioner in reviewing the proposed acquisition of control. (g) The provisions of this section do not apply to any offer, request, invitation, agreement or acquisition that the Commissioner by order exempts as not having been made or entered into for the purpose and not having the effect of changing or influencing the control of a domestic insurer, or as otherwise not comprehended within the purposes of this section. (h) The following are violations of this section: (1) the failure to file any statement, amendment or other material required to be filed pursuant to subsection (a) or (b); or (2) the effectuation or any attempt to effectuate an acquisition of, control of, divestiture of, or merger with, a domestic insurer unless the Commissioner has given approval. (i) The courts of this Territory are vested with jurisdiction over every person not resident, domiciled or authorized to do business in the Virgin Islands who files a statement with the Commissioner under this section, and overall actions arising out of violations of this section, and each person is considered to have performed acts equivalent to and constituting an appointment by the person of the Commissioner to be the person’s true and lawful attorney in fact upon whom may be served all lawful process in any action, suit or proceeding arising out of violations of this section. Copies of all lawful process must be served on the Commissioner and transmitted by registered or certified mail by the Commissioner to the person at his last known address.