20-481.07. Approval and issues; notice; hearings

A. The tender offer for or request or invitation for tenders, merger or other acquisition of control may not be consummated until it is approved by the director. The director shall approve the transaction unless the director finds the tender offer for or request or invitation for tenders, merger or other acquisition of control:

1. Is contrary to law.

2. Is inequitable to the shareholders of any domestic insurer involved.

3. Would substantially reduce the security of and service to be rendered to policyholders of the domestic insurer in this state or elsewhere.

4. After the change of control the domestic insurer would not be able to satisfy the requirements for the reissuance of a certificate of authority to write the line or lines of insurance for which it is presently licensed.

5. The effect of which would substantially lessen competition in insurance in this state or tend to create a monopoly. In applying the competitive standard in this paragraph:

(a) The informational requirements of section 20-481.25, subsection C and the standards of section 20-481.25, subsection D apply.

(b) The merger or other acquisition shall not be disapproved if the director finds that any of the situations meeting the criteria provided by section 20-481.25 exist.

(c) The director may condition the approval of the merger or other acquisition on the removal of the basis of disapproval within a specified period of time.

6. The financial condition of any acquiring party might jeopardize the financial stability of the insurer or prejudice the interest of its policyholders.

7. 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 are not in the public interest.

8. The competence, experience and integrity of those persons who would control the operation of the insurer are such that it would not be in the interest of policyholders of the insurer and of the public to permit the merger or other acquisition of control.

9. The acquisition is likely to be hazardous or prejudicial to the insurance buying public.

B. The director may conduct a hearing as prescribed in section 20-161 regarding any transaction pursuant to section 20-481.02.

C. Any public hearing conducted pursuant to subsection B of this section shall be held within thirty days after the statement required by section 20-481.02 is filed, and at least twenty days after the director gives written notice of the hearing to the person filing the statement. The person filing the statement shall give at least ten days' written notice of the hearing to the insurer and to any other persons designated by the director. The insurer shall give the written notice to its security holders.

D. If the director does not give notice of a hearing pursuant to subsections B and C of this section, the person filing the statement shall give written notice of the filing on a form prescribed by the director to the insurer and to any other persons designated by the director. The insurer shall give the written notice to its security holders. The person filing the statement, the insurer, any designated recipient of the written notice of the filing and any person whose interests may be affected by the filing have ten days from the date of the written notice to request that the director hold a hearing on the filing pursuant to this section. The request shall specify the grounds for the hearing and the interests that would be affected by the filing.

E. If the director finds that the request is made in good faith, that the interests of the person requesting the hearing would be affected by the filing if the grounds are established, and that the grounds otherwise justify holding a hearing, the director shall grant the request for a hearing and issue a notice of hearing to all persons entitled to the notice pursuant to subsection C of this section. The hearing shall be held no earlier than twenty days from the date of the notice.

F. If a hearing is scheduled, the person filing the statement, the insurer, any person to whom written notice of hearing was sent and any other person whose interests may be affected shall have the right to present evidence, examine and cross-examine the witnesses and offer oral and written arguments at the hearing. Prior to the hearing, persons shall be entitled to take depositions upon oral examination in the same manner as is allowed in the superior court of this state. All depositions shall be concluded not later than three days prior to the commencement of the public hearing. The director shall make a determination within thirty days after the conclusion of the hearing. Except as otherwise provided in this subsection the provisions of title 41, chapter 6, article 10 shall apply to hearings, orders and appeals.

G. All statements, amendments or other material filed pursuant thereto, and all notices of public hearing held pursuant to this section, shall be mailed by the insurer to its shareholders within five business days after the insurer has received the statements, amendments, other material or notices. The expenses of mailing shall be paid by the person making the filing. As security for the payment of the expenses, the person shall file with the director an acceptable bond or other deposit in an amount to be determined by the director.

20-481.07. Approval and issues; notice; hearings

A. The tender offer for or request or invitation for tenders, merger or other acquisition of control may not be consummated until it is approved by the director. The director shall approve the transaction unless the director finds the tender offer for or request or invitation for tenders, merger or other acquisition of control:

1. Is contrary to law.

2. Is inequitable to the shareholders of any domestic insurer involved.

3. Would substantially reduce the security of and service to be rendered to policyholders of the domestic insurer in this state or elsewhere.

4. After the change of control the domestic insurer would not be able to satisfy the requirements for the reissuance of a certificate of authority to write the line or lines of insurance for which it is presently licensed.

5. The effect of which would substantially lessen competition in insurance in this state or tend to create a monopoly. In applying the competitive standard in this paragraph:

(a) The informational requirements of section 20-481.25, subsection C and the standards of section 20-481.25, subsection D apply.

(b) The merger or other acquisition shall not be disapproved if the director finds that any of the situations meeting the criteria provided by section 20-481.25 exist.

(c) The director may condition the approval of the merger or other acquisition on the removal of the basis of disapproval within a specified period of time.

6. The financial condition of any acquiring party might jeopardize the financial stability of the insurer or prejudice the interest of its policyholders.

7. 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 are not in the public interest.

8. The competence, experience and integrity of those persons who would control the operation of the insurer are such that it would not be in the interest of policyholders of the insurer and of the public to permit the merger or other acquisition of control.

9. The acquisition is likely to be hazardous or prejudicial to the insurance buying public.

B. The director may conduct a hearing as prescribed in section 20-161 regarding any transaction pursuant to section 20-481.02.

C. Any public hearing conducted pursuant to subsection B of this section shall be held within thirty days after the statement required by section 20-481.02 is filed, and at least twenty days after the director gives written notice of the hearing to the person filing the statement. The person filing the statement shall give at least ten days' written notice of the hearing to the insurer and to any other persons designated by the director. The insurer shall give the written notice to its security holders.

D. If the director does not give notice of a hearing pursuant to subsections B and C of this section, the person filing the statement shall give written notice of the filing on a form prescribed by the director to the insurer and to any other persons designated by the director. The insurer shall give the written notice to its security holders. The person filing the statement, the insurer, any designated recipient of the written notice of the filing and any person whose interests may be affected by the filing have ten days from the date of the written notice to request that the director hold a hearing on the filing pursuant to this section. The request shall specify the grounds for the hearing and the interests that would be affected by the filing.

E. If the director finds that the request is made in good faith, that the interests of the person requesting the hearing would be affected by the filing if the grounds are established, and that the grounds otherwise justify holding a hearing, the director shall grant the request for a hearing and issue a notice of hearing to all persons entitled to the notice pursuant to subsection C of this section. The hearing shall be held no earlier than twenty days from the date of the notice.

F. If a hearing is scheduled, the person filing the statement, the insurer, any person to whom written notice of hearing was sent and any other person whose interests may be affected shall have the right to present evidence, examine and cross-examine the witnesses and offer oral and written arguments at the hearing. Prior to the hearing, persons shall be entitled to take depositions upon oral examination in the same manner as is allowed in the superior court of this state. All depositions shall be concluded not later than three days prior to the commencement of the public hearing. The director shall make a determination within thirty days after the conclusion of the hearing. Except as otherwise provided in this subsection the provisions of title 41, chapter 6, article 10 shall apply to hearings, orders and appeals.

G. All statements, amendments or other material filed pursuant thereto, and all notices of public hearing held pursuant to this section, shall be mailed by the insurer to its shareholders within five business days after the insurer has received the statements, amendments, other material or notices. The expenses of mailing shall be paid by the person making the filing. As security for the payment of the expenses, the person shall file with the director an acceptable bond or other deposit in an amount to be determined by the director.