2015 Wyoming Code
TITLE 26 - INSURANCE CODE
CHAPTER 44 - INSURANCE HOLDING COMPANY SYSTEM REGULATORY ACT
SECTION 26-44-103. - Acquisition of control of or merger with domestic insurer.
26-44-103. Acquisition of control of or merger with domestic insurer.
(a) No person other than the issuer shall make a tender offer for or a request or invitation for tenders of, or agreement to exchange securities for or otherwise acquire, any voting security or any security convertible into a voting security of a domestic insurer or of any other person controlling a domestic insurer if, after consummation, the person would, directly or indirectly, be in control of the insurer and no person shall enter into an agreement to merge with or otherwise acquire control of a domestic insurer unless:
(i) Thirty (30) days prior to the above transactions the person has filed with the commissioner and has sent to the insurer a statement containing the information required by this section;
(ii) The offer, request, invitation, agreement or acquisition has been approved by the commissioner. For purposes of this section a domestic insurer includes any person controlling a domestic insurer unless the person, as determined by the commissioner, is either directly or through its affiliates primarily engaged in business other than the business of insurance. For the purposes of this section, "person" does not include any securities broker holding, in the usual and customary broker's function, less than twenty percent (20%) of the voting securities of an insurance company or of any person which controls an insurance company; and
(iii) If any controlling person of a domestic insurer is seeking to divest its controlling interest in the domestic insurer in any manner, the controlling person has filed with the commissioner, with a copy to the insurer, confidential notice of its proposed divestiture at least thirty (30) days prior to the cessation of control. The commissioner shall determine those instances in which the party seeking to divest or to acquire a controlling interest in an insurer will be required to file for and obtain approval of the transaction. The information shall remain confidential until the conclusion of the transaction unless the commissioner, in his discretion determines that confidential treatment will interfere with enforcement of this section. If the statement referred to in paragraph (i) of this subsection is otherwise filed by the acquiring person or as otherwise required, this paragraph shall not apply.
(b) The preacquisition statement required by subsection (a) of this section shall be made under oath or affirmation and shall contain the following:
(i) 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 made and the following:
(A) If the person is an individual, his principal occupation and all offices and positions held during the past five (5) years, and any conviction of crimes other than minor traffic violations during the past ten (10) years;
(B) If the person is not an individual, a report of the nature of its business operations during the past five (5) years or for such lesser period as the person and any predecessors of the person have been in existence, an informative description of the business intended to be done by the person and the person's subsidiaries, and a list of all individuals who are or who have been selected to become directors or executive officers of the person, or who perform or will perform functions appropriate to these positions. The list shall include for each individual the information required by subparagraph (A) of this paragraph.
(ii) 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 where funds were or are to be obtained for that purpose including any pledge of the insurer's stock or the stock of any of its subsidiaries or controlling affiliates, and the identity of persons furnishing the funds where a source of the funds 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;
(iii) Fully audited financial information as to the earnings and financial condition of each acquiring party for the preceding five (5) fiscal years or for any lesser period the acquiring party and any of its predecessors have been in existence, and similar unaudited information as of a date not earlier than ninety (90) days before the filing of the statement;
(iv) Any plans or proposals which each acquiring party may have to liquidate the 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;
(v) 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 subsection (a) of this section, and a statement as to the method by which the fairness of the proposal was determined;
(vi) The amount of each class of any security referred to in subsection (a) which is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party;
(vii) 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. The description shall identify the persons with whom the contracts, arrangements or understandings have been entered;
(viii) A description of the purchase of any security referred to in subsection (a) of this section during the twelve (12) 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;
(ix) A description of any recommendations to purchase any security referred to in subsection (a) of this section made during the twelve (12) calendar months preceding the filing of the statement by any acquiring party or by anyone based upon interviews or at the suggestion of the acquiring party;
(x) 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 related soliciting material;
(xi) 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;
(xii) An agreement by the person required to file the statement referred to in subsection (a) of this section that it will provide the annual report, specified in W.S. 26-44-104(n), for so long as control exists;
(xiii) An acknowledgement by the person required to file the statement referred to in subsection (a) of this section that the person and all subsidiaries within its control in the insurance holding company system will provide information to the commissioner upon request as necessary to evaluate enterprise risk to the insurer; and
(xiv) Any additional information as the commissioner may by rule or regulation prescribe as necessary or appropriate for the protection of policyholders of the insurer or in the public interest.
(c) 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 subsection (b) of this section shall be given with respect to each partner of the partnership or limited partnership, each member of the syndicate or group, and each person who controls the partner or member. If any 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 subsection (b) of this section shall be given with respect to the corporation, each officer and director of the corporation, and each person who is directly or indirectly the beneficial owner of more than ten percent (10%) of the outstanding voting securities of the corporation.
(d) If any material change occurs in the facts set forth in the statement filed with the commissioner and sent to the insurer pursuant to this section, an amendment setting forth the change, together with copies of all documents and other material relevant to the change, shall be filed with the commissioner and sent to the insurer within two (2) business days after the person learns of the change.
(e) If any offer, request, invitation, agreement or acquisition referred to in subsection (a) 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 (a) of this section may utilize documents prepared for those laws in furnishing the information called for by this section.
(f) The commissioner shall approve any merger or other acquisition of control referred to in subsection (a) of this section unless after a public hearing he finds that:
(i) After the change of control, the domestic insurer referred to in subsection (a) of this section would not 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;
(ii) The effect of the merger or other acquisition of control would substantially lessen competition in insurance in Wyoming or tend to create a monopoly in Wyoming. The commissioner may condition the approval of the merger or other acquisition on the removal of the basis of disapproval within a specified period of time;
(iii) The financial condition of any acquiring party might jeopardize the financial stability of the insurer, or prejudice the interest of its policyholders;
(iv) 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 unfair and unreasonable to policyholders of the insurer and not in the public interest;
(v) 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; or
(vi) The acquisition is likely to be hazardous or prejudicial to the insurance buying public.
(g) The public hearing referred to in subsection (f) of this section shall be held within thirty (30) days after the statement required by subsection (a) of this section is filed, and at least twenty (20) days notice of the hearing shall be given by the commissioner to the person filing the statement. Not less than seven (7) days notice of the public hearing shall be given by the person filing the statement to the insurer and to any other persons designated by the commissioner. The commissioner shall make a determination within thirty (30) 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 interest may be affected shall have the right to present evidence, examine and cross-examine witnesses, and offer oral and written arguments and shall be entitled to conduct discovery proceedings in the same manner as is presently allowed in district court. All discovery proceedings shall be concluded not later than three (3) days prior to the commencement of the public hearing.
(h) If the proposed acquisition of control will require the approval of more than one (1) commissioner, the public hearing referred to in subsection (g) of this section may be held on a consolidated basis upon request of the person filing the statement referred to in subsection (a) of this section. The person shall file the statement referred to in subsection (a) of this section with the National Association of Insurance Commissioners within five (5) days of making the request for a public hearing. A commissioner may opt out of a consolidated hearing, and shall provide notice to the applicant of the opt-out within ten (10) days of the receipt of the statement referred to in subsection (a) of this section. A hearing conducted on a consolidated basis shall be public and shall be held within the United States before the commissioners of the states in which the insurers are domiciled. The commissioners shall hear and receive evidence. A commissioner may attend the hearing in person or by telecommunication.
(j) In connection with a change of control of a domestic insurer, any determination by the commissioner that the person acquiring control of the insurer shall be required to maintain or restore the capital of the insurer to the level required by the laws and regulations of this state shall be made not later than sixty (60) days after the date of notification of the change in control submitted pursuant to subsection (a) of this section.
(k) The commissioner may retain at the acquiring person's expense any attorneys, actuaries, accountants and other experts not otherwise a part of the commissioner's staff reasonably necessary to assist the commissioner in reviewing the proposed acquisition of control.
(m) The provisions of this section do not apply to:
(i) Any transaction which is subject to the provisions of W.S. 26-24-146 through 26-24-149;
(ii) Any offer, request, invitation, agreement or acquisition which the commissioner by order shall exempt 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.
(n) The following shall be violations of this section:
(i) The failure to file any statement, amendment or other material required to be filed pursuant to subsection (a) or (b) of this section; or
(ii) The effectuation or any attempt to effectuate an acquisition of control of, divestiture of, or merger with, a domestic insurer unless the commissioner has given approval.
(o) The Wyoming courts have jurisdiction over every person who files a statement with the commissioner under this section, and overall actions arising out of violations of this section. Any person filing a statement with the commissioner appoints the commissioner as his agent for service of process for actions arising under this section. The commissioner shall send copies of all legal services by certified mail to the appropriate person at his last known address.
Disclaimer: These codes may not be the most recent version. Wyoming may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.