Virginia Administrative Code › Title 14 - INSURANCE › Agency 5 - STATE CORPORATION COMMISSION, BUREAU OF INSURANCE › Chapter 260 - RULES GOVERNING INSURANCE HOLDING COMPANIES › Section 14VAC5-260-50 - Acquisitions involving insurers not otherwise covered

Current through Register Vol. 40, No. 24, July 15, 2024
A. An acquisition covered by §
				38.2-1323B of the Act may be subject to orders pursuant to § 38.2-1323B
				and C of the Code of Virginia unless the acquiring party files a
				pre-acquisition notification or an acquisition statement in the format
				prescribed by Form E of this chapter. The person being acquired may file the
				statement.
1. The commission may enter an
				order suspending the license of an insurer involved in 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 this Commonwealth or tend to
				create a monopoly therein, and is detrimental to policyholders or the public in
				general.
2. An order suspending the
				license may also be entered if the insurer fails to file adequate information
				sufficient to rebut a reasonable belief that the merger or acquisition causes
				or tends to cause a substantial lessening of competition in any line of
				insurance, and also is detrimental to policyholders or the public.
3. In determining whether competition may be
				detrimental, the commission shall consider, among other things, whether
				applicable competitive standards promulgated by the NAIC have or may be
				violated as a consequence of the acquisition. The standards may include any
				indicators of competition identified or enumerated by the NAIC in any model
				laws or portions of practice and procedure or instructional manuals developed
				to provide guidance in regulatory oversight of holding company systems, mergers
				and acquisitions, or competitive practices within the marketplace. The
				standards include the definitions, guidelines or standards embodied in any
				model holding company act or model holding company regulation adopted by the
				NAIC. In addition, the commission may request and consider the opinion of an
				economist as to the competitive impact of the acquisition whenever
				pre-acquisition notification is submitted pursuant to § 38.2-1323B of the
				Act.
4. An order suspending the
				license shall not be entered under § 38.2-1323B of the Act unless the
				involved insurer has received 10 days' notice and an opportunity to be heard.
				The notice of hearing shall be accompanied by a request for information as
				required by § 38.2-1324 of the Act; it may include also a request for an
				opinion of an economist as to the competitive impact of the acquisition.
a. Requested information shall be filed as an
				acquisition statement in the format of Form E of this chapter.
b. If the commission determines that the
				acquisition or merger causes or tends to cause a substantial lessening of
				competition in any line of insurance, the commission may request the insurer to
				furnish the additional information required by § 38.2-1324, in order to
				rebut the reasonable belief that the lessening of competition is detrimental to
				policyholders or the public in general.
5. An order suspending the license shall not
				be entered under § 38.2-1323B of the Code of Virginia and this section 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 the
				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.
6. The commission's order suspending the
				license entered under this section shall not become final earlier than 21 days
				after it is issued, during which time the involved insurer may submit a plan to
				remedy the anticompetitive impact of the acquisition within a reasonable time.
				Based upon the plan or other information, the commission shall specify the
				conditions, if any, under the time period during which the aspects of the
				acquisition causing a violation of the applicable competitive standards
				announced by the commission would be remedied and the order vacated or
				modified.