Ohio Administrative Code › Title 3901 - Department of Insurance › Chapter 3901-3 - Acquisitions and Mergers; Insurance Holding Company Systems › Section 3901-3-01 - Requirement for approval of the proposed acquisition of control of or merger with a domestic insurer

Current through all regulations passed and filed through July 1, 2024
(A) Purpose
The purpose of this rule is to establish the content of and
				form to be used in the application for approval of the proposed transaction
				with an insurer domiciled in this state. Section
				3901.321
				of the Revised Code requires any person who wishes to engage in any transaction
				described in division (B)(1) of section
				3901.321
				of the Revised Code to file with the superintendent an information statement
				(hereinafter called "form A").
(B) Authority
This rule is promulgated pursuant to the authority vested in
				the superintendent under sections
				3901.321
				and
				3901.041
				of the Revised Code.
(C)
			 Additional information
In addition to the information expressly required to be
				included in form A, there shall be added such further material information, if
				any, as may be necessary to make the information contained therein not
				misleading. The superintendent reserves the right to request other information
				or documentation that in the superintendent's sole discretion is deemed
				necessary or appropriate for the protection of policyholders of the domestic
				insurer or in the public interest.
(D) Exhibits
Applicants may file supplemental exhibits as desired in
				addition to those expressly required by form A. Exhibits shall clearly indicate
				the subject matter to which they refer.
(E) Amendments or modifications
Applicants shall promptly advise the superintendent of any
				changes in the information furnished on form A arising subsequent to the date
				upon which the information was furnished.
(F) Definitions
Terms found in this regulation are used as defined in the
				Insurance Holding Company Systems Regulatory Act, sections
				3901.32
				to
				3901.37
				of the Revised Code, and rule
				3901-3-02
				of the Administrative Code.
(G) General requirements
Applicants must file the information statement in the exact
				form as set forth in paragraph (H) of this rule. The statement shall contain
				the numbers and captions of all items. If the answer to any item is in the
				negative, an appropriate statement to that effect shall be made.
				
									The information statement, including exhibits and all
				other  documents filed as a part
				thereof, shall be filed with the superintendent in
				physical or electronic form. 
									The information statement, including exhibits and
				all other  documents filed as a
				part thereof shall be clear, easily readable and in the English language with
				monetary values stated in United States currency. If any exhibit or document filed is in a foreign language
				it shall be accompanied by a translation into the English language and any
				monetary value shown in a foreign currency shall be converted into United
				States currency.
(H)
			 Information to be included in form A.
"Form A
Statement regarding the acquisition of control of or merger
				with a domestic insurer
_____________________________________________________
Name of domestic insurer
by
_____________________________________________________
_____________________________________________________
_____________________________________________________
Name and address of acquiring person
Filed with the insurance department of
_____________________________________________________
(State of domicile of insurer being acquired)
Dated: ________________________________, 20_____
Name, title, address and telephone number of individual to whom
				notices and correspondence concerning this statement should be
				addressed:
_____________________________________________________
_____________________________________________________
_____________________________________________________
Item 1. Insurer and method of acquisition
State the name and address of the domestic insurer to which
				this application relates and a brief description of how control is to be
				acquired.
Item 2. Identity
			 and background of the applicant
(A) State the
			 name and address of the applicant seeking to acquire control of the
			 insurer.
(B) If the applicant is
			 not an individual, state the nature of its business operations for the past
			 five years or for such lesser period as such person and any predecessors
			 thereof shall have been in existence. Briefly describe the business intended to
			 be done by the applicant and the applicant's subsidiaries.
(C) Furnish a chart or listing clearly
			 presenting the identities of and inter-relationships among the applicant and
			 all affiliates of the applicant. Indicate in such chart or listing the
			 percentage of voting securities of each such person which is owned or
			 controlled by the applicant or by any other such person. If control of any
			 person is maintained other than by the ownership or control of voting
			 securities, indicate the basis of such control. As to each person specified in
			 such chart or listing indicate the type of organization (e.g., corporation,
			 trust, partnership) and the state or other jurisdiction of domicile. If court
			 proceedings involving a reorganization or liquidation are pending with respect
			 to any such person, indicate which person, and set forth the title of the
			 court, nature of proceedings and the date when commenced.
Item 3. Identity and background of
			 individuals associated with the applicant
(1)
			 Identify the applicant if (s)he is an individual or, if the applicant is not an
			 individual, all persons who are directors, executive officers or owners of ten
			 percent or more of the voting securities of the applicant.
(2) Each individual applicant or all persons
			 who are directors, executive officers or owners of ten percent or more of the
			 voting securities of the applicant shall complete a biographical affidavit and
			 authority for release of information that is prescribed for such use by the
			 superintendent.
Item 4.
			 Nature, source and amount of consideration
(A)
			 Describe the nature, source and amount of funds or other consideration used or
			 to be used in effecting the proposed transaction. If any part of the
			 consideration is or is to be borrowed or otherwise obtained for the purpose of
			 acquiring, holding or trading securities, furnish a description of the
			 transaction, the names of the parties thereto, the relationship, if any
			 (whether direct or indirect), between the borrower and the lender, the amounts
			 borrowed or to be borrowed, and copies of all agreements, understanding,
			 promissory notes and security arrangements relating thereto. If the stock or
			 any asset of the domestic insurer is to be pledged or hypothecated in any way,
			 so describe and provide a copy of the agreement or arrangement.
(B) Explain the criteria used in determining
			 the nature and amount of such consideration.
Item 5. Future plans of insurer
(1) Describe any contemplated or actual plans
			 or proposals which the applicant may have to: cause the insurer to declare
			 dividends, liquidate or dissolve the insurer, sell any asset of the insurer,
			 enter into any rental, leasing, service or financial, or other arrangements
			 with the insurer, or merge/reorganize the insurer with any person or persons.
			 Provide terms and conditions of all applicable arrangements to the
			 transaction.
(2) Provide a plan of
			 operation for the domestic insurer for three years following consummation of
			 the proposed transaction including: type of business to be written, amount of
			 anticipated premiums, investment policy, marketing plans, relocation of home
			 office or of corporate records and changes in reinsurance or
			 reinsurers.
(3) Describe all
			 changes planned to be made after consummation of the proposed transaction
			 concerning the board of directors or executive officers of the domestic insurer
			 and those of the organization which will succeed the latter as a result of the
			 proposed transaction. Describe the nature, extent and amount of any commitments
			 to or agreements or understandings with the present officers and directors of
			 the domestic insurer. Attach copies of all contemplated or actual contracts,
			 commitments, agreements or understandings for: employment, consultation,
			 advice, management or services.
(4)
			 Provide pro forma balance sheets and income statements of the insurer prepared
			 in accordance with statutory accounting principles, for three years following
			 consummation of the proposed transaction. If any part of the consideration for
			 the proposed transaction involves borrowed funds, describe debt service in
			 detail. If any part of the consideration is to be obtained from or financed by
			 an affiliate of the applicant, identify the source of funds and describe the
			 method of distribution.
(5) If the
			 insurer will be a member of an insurance holding company system following
			 consummation of the proposed transaction, provide the following:
(a) A pro forma balance sheet and income
			 statement showing the effect of the proposed transaction, prepared on a
			 consolidated and applicant-only basis.
(b) If the applicant is an insurer actively
			 engaged in the business of insurance, the statements shall be prepared in
			 accordance with statutory accounting principles.
(c) If the applicant is not an insurer
			 actively engaged in the business of insurance, the statements shall be prepared
			 in accordance with generally accepted accounting principles.
(6) State the amount of premiums
			 written by the domestic insurer and all affiliates for each line of business
			 transacted in Ohio, as of the thirty-first day of December next preceding.
			 State the amount of premiums written by the applicant and all affiliates for
			 each line of business transacted in Ohio, as of the thirty-first day of
			 December next preceding.
Item
			 6. Voting securities to be acquired
State the number of shares of the insurer's voting securities
				which the applicant, its affiliates and any person listed in item 3, plans to
				acquire. Describe the terms of the offer, request, invitation, agreement or
				acquisition. State the method used to determine the fairness of the
				proposal.
Item 7. Ownership
			 of voting securities
State the amount of each class of any voting security of the
				insurer which is beneficially owned or concerning which there is a right to
				acquire beneficial ownership by the applicant, its affiliates or any person
				listed in item 3.
Item 8.
			 Contracts, arrangements, or understandings with respect to voting securities of
			 the insurer
Fully describe any contracts, arrangements or understandings
				with respect to any voting security of the insurer in which the applicant, its
				affiliates or any person listed in item 3 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. Identify the persons with whom such contracts,
				arrangements or understandings have been entered.
File as exhibits copies of all tender offers for, requests or
				invitations for, tenders of, exchange offers for, and agreements to acquire or
				exchange any voting securities of the insurer and, if distributed, of
				additional soliciting material relating thereto and annual reports to the
				stockholders of the insurer and applicant for the last two fiscal years.
Item 9. Recent purchases of voting
			 securities
Describe any purchases of any voting securities of the insurer
				by the applicant, its affiliates or any person listed in item 3 during the
				twelve calendar months preceding the filing of this statement. Include in the
				description the dates of purchase, the names of the purchasers, and the
				consideration paid or agreed to be paid therefore. State whether any such
				shares are pledged or hypothecated.
Item
			 10. Recent recommendations to purchase
Describe any recommendations to purchase any voting security of
				the insurer made by the applicant, its affiliates or any person listed in item
				3, or by anyone based upon interviews or at the suggestion of the applicant,
				its affiliates or any person listed in item 3 during the twelve calendar months
				preceding the filing of this statement.
Item 11. Agreements with broker-dealers
Describe the terms of any agreement, contract or understanding
				made with any broker-dealer as to solicitation of voting securities of the
				insurer for tender and the amount of any fees, commissions or other
				compensation to be paid to broker-dealers with regard thereto.
Item 12. Financial statements
(A) Financial statements shall be attached to
			 this statement as exhibits. However, list under this item the financial
			 statements so attached.
(B) The
			 financial statements shall include:
(1) the
			 annual financial statements of the persons identified in item 2(C) for the
			 preceding five fiscal years or for such lesser period as such applicant and its
			 affiliates and any of its predecessors shall have been in existence and
(2) similar information covering
			 the period from the end of such person's last fiscal year, if such information
			 is available. Such statements may be prepared on either an individual basis or,
			 unless the superintendent otherwise requires, on a consolidated basis, if the
			 consolidated statements are prepared in the usual course of business.
(C) The annual financial
			 statements of the applicant shall be accompanied by the certificate of an
			 independent public accountant to the effect that such statements present fairly
			 the financial position of the applicant and the results of its operations for
			 the year then ended, in conformity with generally accepted accounting
			 principles or with requirements of insurance or other accounting principles
			 prescribed or permitted under law. If the applicant is an insurer which is
			 actively engaged in the business of insurance, the financial statements must be
			 based on the annual statement of such person filed with the insurance
			 department of the person's domiciliary state and be in accordance with the
			 requirements of insurance or other accounting principles prescribed or
			 permitted under the law and regulations of such state.
Item 13. Corporate authority
If the applicant is not an individual, file a certified copy
				of:
(1) The resolution of the board of
			 directors of the applicant approving the transaction and directing that the
			 agreement underlying the transaction be submitted to a vote of the
			 shareholders, members or policyholders entitled to vote on the
			 matter.
(2) The resolution of the
			 shareholders, members or policyholders of the applicant approving the
			 transaction.
Item 14.
			 Notice to domestic insurer
State whether the applicant has sent a copy of form A to the
				domestic insurer.
Item 15.
			 Signature and certification
Signature and certification required as follows:
Signature
Pursuant to the requirements of section
				3901.321
				of the Revised Code ________________ has caused this application to be duly
				signed on its behalf in the city of ______________ and state of______________
				on the ___________ day of __________, 20______.
_____________________________________________________
Name of applicant
By: _____________________________, its:
				_____________________________
(Name)
Attest: ________________________________,
				________________________________
(Signature of officer) (Title)
Certification
The undersigned deposes and says that (s)he has duly executed
				the attached application dated __________________, 20_____, for and on behalf
				of _________________________(Name of applicant), and that (s)he is authorized
				to execute and file such instrument. Deponent further says that (s)he is the
				________________________ of such company and that (s)he is familiar with such
				instrument and the contents thereof, and that the facts therein set forth are
				true to the best of his or her knowledge, information and belief.
(Signature)
___________________________
____________________________________
(Type or print name)
State of _______________________)
ss
County of _____________________)
The foregoing instrument was acknowledged before me
				this___________ day of ______________, 20____.
_______________________________
Notary public"