2006 Code of Virginia § 38.2-1334.1 - Voting of securities, injunctions and sequestration of voting securities

38.2-1334.1. Voting of securities, injunctions and sequestration of votingsecurities.

A. No security which is the subject of any agreement or arrangement regardingacquisition, or which is acquired or to be acquired, in contravention of theprovisions of this article or of any rule, regulation or order issued by theCommission hereunder, may be voted at any shareholders' meeting, or may becounted for quorum purposes, and any action of shareholders requiring theaffirmative vote of a percentage of shares may be taken as though suchsecurities were not issued and outstanding. However, no action taken at anysuch meeting shall be invalidated by the voting of such securities, unlessthe action would materially affect control of an insurer subject to anyprovision of this article or unless the Commission or other court of thisCommonwealth has so ordered. If the insurer has reason to believe that anysecurity of the insurer has been or is about to be acquired in contraventionof the provisions of this article or of any rule, regulation or order issuedby the Commission hereunder, the insurer may apply to the Commission to enteran order (i) enjoining any offer or agreement of merger made in contraventionof 38.2-1331; (ii) enjoining any offer, request, invitation, agreement oracquisition made in contravention of 38.2-1323; (iii) enforcing any rule,regulation or order issued by the Commission under the foregoing sections toenjoin the voting of any security so acquired; or (iv) voiding any vote ofsuch security already cast at any meeting of shareholders or providing forsuch other equitable relief as the nature of the case and the interest of theinsurer's policyholders, creditors and shareholders or the public may require.

B. Whenever it appears to the Commission that any person has committed or isabout to commit a violation of this article, the Commission may enter anorder enjoining such person from violating or continuing to violate thisarticle or any such rule or order, and for such other equitable relief as thenature of the case and the interests of the domestic insurer's policyholdersor the public may require.

C. In any case where a person has acquired or is proposing to acquire anyvoting securities in violation of this article or any rule, regulation ororder issued by the Commission hereunder, the Commission may, afterreasonable notice, upon application of the insurer or application of theCommissioner of Insurance, seize or sequester any voting securities of theinsurer owned directly or indirectly by the person, and issue the order withrespect thereto as may be appropriate to effectuate the provisions of thisarticle.

Notwithstanding any other provisions of law, for the purposes of thisarticle, the situs of the ownership of the securities of domestic insurersshall be deemed to be in this Commonwealth.

D. The actions authorized by this section are in addition to any remediesprovided for by other sections of this title and may be imposed, in additionto or in lieu of any other penalties or actions provided for by law, wheneversuch actions involve a person that is neither domiciled nor licensed in thisCommonwealth.

(1993, c. 158.)