2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 521A - INSURANCE HOLDING COMPANY SYSTEMS
521A.3 - ACQUISITION OF CONTROL OF OR MERGER WITH DOMESTIC INSURER.

        521A.3  ACQUISITION OF CONTROL OF OR MERGER WITH
      DOMESTIC INSURER.
         1.  Filing requirements.  No person other than the issuer
      shall make a tender offer for or a request or invitation for tenders
      of, or enter into any agreement to exchange securities for, seek to
      acquire, or acquire, in the open market or otherwise, any voting
      security of a domestic insurer 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 insurer, and
      no person shall enter into an agreement to merge with or otherwise to
      acquire control of a domestic insurer unless, at the time any such
      offer, request, or invitation is made or any such agreement is
      entered into, or prior to the acquisition of such securities if no
      offer or agreement is involved, such person has filed with the
      commissioner and has sent to such insurer, and such insurer has sent
      to its shareholders, a statement containing the information required
      by this section and such offer, request, invitation, agreement or
      acquisition has been approved by the commissioner in the manner
      hereinafter prescribed.
         For purposes of this section a domestic insurer shall include any
      other person controlling a domestic insurer unless the other person
      is either directly or through its affiliates primarily engaged in
      business other than the business of insurance.  However, for purposes
      of this section "person" does not include a securities broker
      holding, in the usual and customary broker's function, less than
      twenty percent of the voting securities of an insurance company or of
      a person which controls an insurance company.
         2.  Content of statement.  The statement to be filed with the
      commissioner hereunder shall be made under oath or affirmation and
      shall contain the following information:
         a.  The name and address of each person by whom or on whose
      behalf the merger or other acquisition of control referred to in
      subsection 1 of this section is to be effected, hereinafter called
      "acquiring party".
         (1)  If such person is an individual, the individual's 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.
         (2)  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
      or will perform functions appropriate to such positions.  Such list
      shall include for each such individual the information required by
      subparagraph (1) of this paragraph.
         b.  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 in which funds were or are to be
      obtained for any such purpose including a pledge of the insurer's
      stock, or the stock of any of its subsidiaries or controlling
      affiliates, and the identity of persons furnishing the consideration.
      However, if a source of the 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 the statement so
      requests.
         c.  Fully audited financial information as to the earnings and
      financial condition of each acquiring party for the preceding five
      fiscal years of each such acquiring party, or 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.
         d.  Any plans or proposals which each acquiring party may have
      to liquidate such insurer, 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.
         e.  The number of shares of any security referred to in
      subsection 1 of this section which each acquiring party proposes to
      acquire, and the terms of the offer, request, invitation, agreement,
      or acquisition referred to in subsection 1 of this section, and a
      statement as to the method by which the fairness of the proposal was
      arrived at.
         f.  The amount of each class of any security referred to in
      subsection 1 of this section which is beneficially owned or
      concerning which there is a right to acquire beneficial ownership by
      each acquiring party.
         g.  A full description of any contracts, arrangements or
      understandings with respect to any security referred to in subsection
      1 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.
         h.  A description of the purchase of any security referred to
      in subsection 1 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 therefor.
         i.  A description of any recommendations to purchase any
      security referred to in subsection 1 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.
         j.  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 1 of this section,
      and, if distributed, of additional soliciting material relating
      thereto.
         k.  The terms of any agreement, contract or understanding made
      with any broker-dealer as to solicitation of securities referred to
      in subsection 1 of this section for tender, and the amount of any
      fees, commissions or other compensation to be paid to broker-dealers
      with regard thereto.
         l.  Additional information as the commissioner may by rule
      prescribe as necessary or appropriate for the protection of
      policyholders of the insurer or in the public interest.
         If the person required to file the statement referred to in
      subsection 1 of this section is a partnership, limited partnership,
      syndicate or other group, the commissioner may require that the
      information called for by paragraphs "a" through "l" 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 1 of this
      section is a corporation, the commissioner may require that the
      information called for by paragraphs "a" through "l" 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 percent
      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 insurer within two
      business days after the person learns of such change.  Such insurer
      shall send such amendment to its shareholders.
         3.  Alternative filing materials.  If any offer, request,
      invitation, agreement or acquisition referred to in subsection 1 of
      this section is proposed to be made by means of a registration
      statement under the Securities Act of 1933 or in circumstances
      requiring the disclosure of similar information under the Securities
      Exchange Act of 1934, or under a state law requiring similar
      registration, or disclosure, the person required to file the
      statement referred to in subsection 1 of this section may utilize
      such documents in furnishing the information called for by that
      statement.
         4.  Approval by the commissioner -- hearings.
         a.  The commissioner shall approve any merger or other
      acquisition of control referred to in subsection 1 if, after a public
      hearing on such merger or acquisition, the applicant has demonstrated
      to the commissioner all of the following:
         (1)  After the change of control the domestic insurer referred to
      in subsection 1 will be able to satisfy the requirements for the
      issuance of a license to write the line or lines of insurance for
      which it is presently licensed.
         (2)  The effect of the merger or other acquisition of control will
      not substantially lessen competition in insurance in this state.
         (3)  The financial condition of any acquiring party will not
      jeopardize the financial stability of the insurer, or prejudice the
      interest of its policyholders.
         (4)  The plans or proposals which 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 not unfair or unreasonable
      to policyholders of the insurer and are not contrary to the public
      interest.
         (5)  The competence, experience, and integrity of those persons
      who would control the operation of the insurer are sufficient to
      indicate that the interests of policyholders of the insurer and of
      the public will not be jeopardized by the merger or other acquisition
      of control.
         b.  The public hearing referred to in paragraph "a" shall
      be held within thirty days after the statement required by subsection
      1 is filed, and at least twenty days' notice of the public hearing
      shall be given by the commissioner to the person filing the
      statement.  Not less than seven days' notice of the 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 commissioner.  The
      commissioner shall make a determination within thirty days after the
      conclusion of the hearing.  At the hearing, the person filing the
      statement, the insurer, any person to whom 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 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 court of this state.  All
      discovery proceedings shall be concluded not later than three days
      prior to the commencement of the public hearing.
         c.  The commissioner may retain any attorneys, actuaries,
      accountants, and other experts not otherwise a part of the
      commissioner's staff as may be reasonably necessary to assist the
      commissioner in reviewing the proposed merger or acquisition of
      control, the reasonable cost of which shall be paid by the acquiring
      party.
         5.  Exemptions.  The provisions of this section shall not
      apply to any offer, request, invitation, agreement or acquisition
      which the commissioner by order shall exempt therefrom for one of the
      following reasons:
         a.  It has not been made or entered into for the purpose and
      does not have the effect of changing or influencing the control of a
      domestic insurer.
         b.  It is otherwise not comprehended within the purposes of
      this section.
         6.  Violations.  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 subsection 1 or 2 of this
      section.
         b.  The effectuation or any attempt to effectuate an
      acquisition of control of, or merger with, a domestic insurer unless
      the commissioner has given approval thereto.
         7.  Jurisdiction -- consent to service of process.  The
      district court is hereby 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
      over all actions involving such person 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 the person's true and lawful attorney upon
      whom may be served all lawful process, notice or demand in any
      action, suit or proceeding arising out of violations of this section.
      Copies of all such lawful process, notice or demand shall be served
      on the commissioner and transmitted by registered or certified mail
      by the commissioner to such person at the person's last known
      address.  

         Section History: Early Form

         [C71, 73, 75, 77, 79, 81, § 521A.3; 82 Acts, ch 1051, § 4--6] 

         Section History: Recent Form

         86 Acts, ch 1102, § 9--11; 91 Acts, ch 26, §49, 50; 93 Acts, ch
      88, §26; 97 Acts, ch 186, §26
         Referred to in § 505.23, 508B.13, 521.16, 521A.9, 521A.14