2005 Idaho Code - 41-3805 — APPROVAL, DISAPPROVAL OF PROPOSED ACQUISITION

                                  TITLE  41
                                  INSURANCE
                                  CHAPTER 38
                    ACQUISITIONS OF CONTROL AND INSURANCE
                           HOLDING COMPANY SYSTEMS
    41-3805.  APPROVAL, DISAPPROVAL OF PROPOSED ACQUISITION. (1) The director
shall approve any purchase, exchange, merger, or other acquisition of control
referred to in section 41-3802, Idaho Code, or referred to in section 41-3821,
Idaho Code, unless, after a public hearing, the director finds that:
    (a)  After the change of control the domestic insurer could not satisfy
    the requirements for the issuance of a certificate of authority according
    to requirements in force at the time of the issuance, or last renewal or
    continuation of its certificate of authority to do the insurance business
    which it intends to transact in this state;
    (b)  The effect of the purchases, exchanges, merger (of a controlling
    person of the insurer), or other acquisitions of control may be
    substantially to lessen competition in insurance in this state or tend to
    create a monopoly therein. In applying the competitive standard in this
    paragraph:
         (i)   The informational requirements of section 41-3805B(3)(a), Idaho
         Code, and the standards of section 41-3805B(4)(b), Idaho Code, shall
         apply;
         (ii)  The merger or other acquisition shall not be disapproved if the
         director finds that any of the situations meeting the criteria
         provided in section 41-3805B(4)(c), Idaho Code, exist; and
         (iii) 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.
    (c)  The financial condition of an acquiring person is such as would
    jeopardize the financial stability of the insurer, or prejudice the
    interest of its policyholders or, in the case of an acquisition of
    control, the interest of any remaining stockholders who are unaffilliated
    with the acquiring person;
    (d)  The plans or proposals which the acquiring person has to liquidate
    the insurer, to sell its assets, or to merge it with any person, or to
    make any other major 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 would
    control the operation of the insurer indicate that it would not be in the
    interest of policyholders, stockholders, or 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 (1) of this section
shall be held within thirty (30) days after the statement required by section
41-3802, Idaho Code, is filed, and at least twenty (20) days' notice thereof
shall be given by the director to the person filing the statement. Not less
than seven (7) days' notice of such public hearing shall be given by the
person filing the statement to the insurer and to such other persons as may be
designated by the director. The director shall make a determination within
thirty (30) days after the conclusion of such hearing. At such hearing, the
person filing the statement, the insurer, any person to whom notice of hearing
was sent, and any other person whose interest may be affected thereby shall
have the right to present evidence, examine and cross-examine witnesses, and
offer oral and written arguments and in connection therewith shall be entitled
to conduct discovery proceedings in the same manner as is presently allowed in
the district courts in this state. All discovery proceedings shall be
concluded not later than three (3) days prior to the commencement of the
public hearing.
    (3)  Merger, consolidation or bulk reinsurance as to a domestic insurer
shall be effectuated only pursuant to the applicable provisions of chapter 28,
title 41 (organization and corporate procedures of stock and mutual insurers),
Idaho Code, and chapter 30, title 41 (mutual benefit associations), Idaho
Code.
    (4)  The director may retain any attorney, actuary, accountant, or other
individual, organization, corporation, association, or business entity not
otherwise a member of the director's staff as may be reasonably necessary to
assist the department in the processing of any merger or acquisition of
control proposed under this section. All reasonable expenses incurred in
connection herewith shall be borne by the party seeking the acquisition. The
director may require the acquiring party to post a bond in an amount not to
exceed twenty-five thousand dollars ($25,000) as security for payment of such
expenses.
    (5)  The provisions of this section shall not apply to any offer, request,
invitation, agreement or acquisition which the director by order shall exempt
therefrom 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.
    (6)  The following shall be violations of this section:
    (a)  The failure to file any statement, amendment, or other material
    required to be filed pursuant to the provisions of section 41-3802(1) or
    (2), Idaho Code; or
    (b)  The effectuation or any attempt to effectuate an acquisition of
    control of, or merger with, a domestic insurer unless the director has
    given his approval thereto.
    (7)  The courts of Idaho are hereby vested with jurisdiction over every
person not resident, domiciled, or authorized to do business in Idaho who
files a statement with the director under the provisions of section 41-3802,
Idaho Code, and overall actions involving such person arising out of
violations of the provisions of this section, and each such person shall be
deemed to have performed acts equivalent to and constituting an appointment by
such person of the director 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 director and transmitted by registered or certified mail by the
director to such person at his last known address.