Sec. 38a-130. (Formerly Sec. 38-39b). Acquisition of control of domestic insurance companies. Information statement furnished commissioner and insurer. Violations.
Sec. 38a-130. (Formerly Sec. 38-39b). Acquisition of control of domestic insurance companies. Information statement furnished commissioner and insurer. Violations. (a) No person other than the issuer shall make a tender offer for, or a request
or invitation for tenders of, enter into any agreement to exchange securities for, seek to
acquire, or acquire, in the open market or otherwise, any voting security, or solicit any
proxy for the purpose of acquiring control, of a domestic insurance company or, subject
to the provisions of subsection (c) of this section, any corporation controlling a domestic
insurance company if, after the consummation thereof, such person would, directly or
indirectly, or by conversion or by exercise of any right to acquire, be in control of such
domestic insurance company or corporation controlling a domestic insurance company,
and no person shall enter into an agreement to merge with or otherwise acquire control
of a domestic insurance company or any corporation controlling a domestic insurance
company unless, at the time any form of initial offer, request or invitation is made or
the agreement is entered into, or prior to the acquisition of such securities or proxies if
no offer or agreement is involved, such person has filed with the commissioner and has
sent to such insurance company a statement containing the information required by
subsection (b) of this section and such offer, request, invitation, agreement or acquisition
has been approved by the commissioner in the manner hereinafter prescribed.
(b) Such statement shall be made under oath or affirmation and shall contain the
following information:
(1) The name and address of each person by whom or on whose behalf the merger
or other acquisition of control referred to in subsection (a) of this section is to be effected
hereinafter called "acquiring party", and (i) if such person is an individual, his 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 ten years; (ii) if such
person is not an individual, a report of the nature of its business operations during the
past five years or for such lesser period as such person and any predecessors thereof
shall have been in existence; an informative description of the business intended to be
done by such person and such person's subsidiaries; and a list of all individuals who
are or who have been selected to become directors or executive officers of such person,
or who perform functions appropriate to such positions. Such list shall include for each
such individual the information required by subparagraph (i) of this subdivision;
(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 wherein funds
were or are to be obtained for any such purpose including any pledge of the insurance
company's stock, or the stock of any of its subsidiaries or controlling affiliates, and the
identity of persons furnishing such consideration, provided, where a source of such
consideration is a loan made in the lender's ordinary course of business, the identity of
the lender shall remain confidential if the person filing such statement so requests;
(3) Fully audited financial information as to the earnings and financial condition
of each acquiring party or for the preceding five fiscal years of each such acquiring
party for such lesser period as such acquiring party and any predecessors thereof shall
have been in existence, and similar unaudited information as of a date not earlier than
ninety days prior to the filing of the statement;
(4) Any plans or proposals which each acquiring party may have to liquidate such
insurance company, 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) of this section
which each acquiring party proposes to acquire, and the terms of the offer, request,
invitation, agreement or acquisition referred to in said 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) of this
section 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) of this section 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. Such description shall identify the persons with whom such contracts, arrangements or understandings have been entered into;
(8) A description of the purchase of any security referred to in subsection (a) of this
section during the twelve calendar months preceding 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) of this section made during the twelve calendar months preceding the
filing of the statement, by any acquiring party, or by anyone based upon interview or
at the suggestion of such 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) of this section and of additional soliciting material relating thereto;
(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) of this section for tender and the amount of any fees, commissions or other compensation to be paid to broker-dealers with regard thereto;
(12) Such additional information as the commissioner may prescribe as necessary
or appropriate for the protection of policyholders of the insurance company or in the
public interest.
If the person required to file the statement referred to in subsection (a) of this section
is a partnership, limited partnership, syndicate or other group, the commissioner may
require that the information called for by subdivisions (1) to (12), inclusive, of this
subsection shall be given with respect to each partner of such partnership or limited
partnership, each member of such syndicate or group, and each person who controls
such partner or member. If any such partner, member or person is a corporation, or the
person required to file the statement referred to in subsection (a) of this section is a
corporation, the commissioner may require that the information called for by subdivisions (1) to (12), inclusive, of this subsection shall be given with respect to such corporation, each officer and director of such corporation, and each person who is directly or
indirectly the beneficial owner of more than ten per cent of the outstanding voting securities of such corporation. If any material change occurs in the facts set forth in the statement filed with the commissioner and sent to such insurer pursuant to this section, an
amendment setting forth such change, together with copies of all documents and other
material relevant to such change, shall be filed with the commissioner and sent to such
insurance company within two business days after the person learns of such change.
(c) Any person seeking to acquire control of any corporation which is not itself a
domestic insurance company but which controls a domestic insurance company shall
remain fully subject to all the provisions of sections 38a-129 to 38a-140, inclusive,
except if such control is sought to be acquired by means of a tender offer, exchange
offer or solicitation of proxies, the required approval of the commissioner need not be
obtained prior to commencement of such tender offer, exchange offer or solicitation of
proxies. Such person shall, however, be required to furnish the commissioner with a
statement under oath or affirmation containing the information required in subsection
(b) of this section no later than the date on which the tender offer, exchange offer or
solicitation of proxies commences.
(d) The following shall constitute 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) of this section; or (2) the effectuation of, or any attempt to effectuate, an
acquisition of control of, or merger with, a domestic insurance company, other than a
domestic insurance company referred to in subsection (c) of this section, unless the
commissioner has given his prior approval thereto after the hearing required under section 38a-132; or (3) the effectuation of an acquisition of control of, or merger with, a
domestic insurance company referred to in subsection (c) of this section, unless the
commissioner has given his prior approval thereto after the hearing required under section 38a-132. For purposes of subdivision (3) of this subsection, the acquisition, directly
or indirectly, of ten per cent or more of the voting securities of any corporation which
is not itself a domestic insurance company but which controls a domestic insurance
company, whether by tender offer, exchange offer, or otherwise, or the voting of proxies
representing ten per cent or more of the voting securities of any such corporation shall
be presumed to be the effectuation of an acquisition of control of a domestic insurance
company referred to in subsection (c) of this section.
(e) The courts of this state hereby are vested with jurisdiction over every person
not resident, domiciled or authorized to do business in this state who files a statement
with the commissioner under this section, and overall actions involving such persons
arising out of violations of this section, and each such person shall be deemed to have
performed acts equivalent to and constituting an appointment by such a person of the
commissioner to be his true and lawful attorney upon whom may be served all lawful
process in any action, suit or proceeding arising out of violations of this section. Copies
of all such lawful process shall be served on the commissioner in accordance with section
38a-26.
(1969, P.A. 444, S. 2; P.A. 84-185, S. 2; P.A. 85-16, S. 2, 6; P.A. 92-112, S. 14, 35; P.A. 93-239, S. 12, 22.)
History: P.A. 84-185 amended Subsec. (a) to include the control of proxies of a domestic insurance company and the
control of any corporation controlling such a company within the limitations and requirements of the section; P.A. 85-16
added Subsec. (c) re acquisition of control of corporation which controls a domestic insurance company; Sec. 38-39b
transferred to Sec. 38a-130 in 1991; P.A. 92-112 amended Subsec. (a) to provide that no entity may control a domestic
insurance company without the approval of the commissioner, making technical corrections for statutory consistency,
amended Subsec. (b) deleting the prior minimum provisions of the statement made under oath and added twelve new
Subdivs. outlining new criteria, deleted the previous Subsec. (c)(1) and relettered and renumbered the previous Subsec.
(c)(2), made technical changes re nondomestic insurance companies which control domestic insurers, deleted the requirement of the commissioner's approval, deleted language from the former Subsec. (c)(3) and created new Subsec. (c)(2) re
public hearings given to review any acquisition of control and applicable exemptions, added new Subsec. (d) re minimum
provisions of what constitutes a violation of this section and added new Subsec. (e) empowering the courts of this state
with jurisdiction over persons not resident, domiciled or authorized to do business in this state who file a statement with
the commissioner; P.A. 93-239 deleted Subsec. (c)(2) re public hearings given to review any acquisition of control and
applicable exemptions and deleted obsolete references in Subsec. (d).
Annotations to former section 38-39b:
Cited. 166 C. 43. Cited. 184 C. 352.