N.Y. Insurance Law § 1506: Acquisition or retention of control of insurers

§ 1506. Acquisition or retention of control of insurers. (a) No

person, other than an authorized insurer, shall acquire control of any

domestic insurer, whether by purchase of its securities or otherwise,

unless:

(1) it gives twenty days written notice to the insurer, or such

shorter period of notice as the superintendent permits, of its intention

to acquire control, provided that the notice shall include an agreement

by the person seeking to acquire control that the person will provide

the annual report specified in section one thousand five hundred three

of this article for so long as control exists; and

(2) it receives the superintendent's prior approval.

(b) The superintendent shall disapprove such acquisition if he

determines, after notice and an opportunity to be heard, that such

action is reasonably necessary to protect the interests of the people of

this state. Only the following factors may be considered in making such

determination:

(1) the financial condition of the acquiring person and the insurer;

(2) the trustworthiness of the acquiring person or any of its officers

or directors;

(3) a plan for the proper and effective conduct of the insurer's

operations;

(4) the source of the funds or assets for the acquisition;

(5) the fairness of any exchange of shares, assets, cash or other

consideration for the shares or assets to be received;

(6) whether the effect of the acquisition may be substantially to

lessen competition in any line of commerce in insurance or to tend to

create a monopoly therein; and

(7) whether the acquisition is likely to be hazardous or prejudicial

to the insurer's policyholders or shareholders.

(c) (1) The following conditions affecting any controlled insurer,

regardless of when such control has been acquired, are violations of

this article:

(A) the controlling person or any of its officers or directors have

demonstrated untrustworthiness; and

(B) the effect of retention of control, in the case of a domestic

controlled insurer, may be substantially to lessen competition in any

line of commerce in insurance or to tend to create a monopoly therein,

or, in the case of a foreign or alien controlled insurer, may be

substantially to lessen competition in any line of commerce in insurance

in this state or to tend to create a monopoly therein.

(2) If, after notice and an opportunity to be heard, the

superintendent determines that any of the foregoing violations exists,

he shall issue an order based on written findings and cause the same to

be served upon the insurer and all persons affected thereby directing

any person found to be in violation hereof to take appropriate action to

cure such violation. Upon the failure of any such person to comply with

such order, section one thousand five hundred ten of this article shall

become applicable.

(d) The superintendent may require the submission of such information

as he deems necessary to determine whether any acquisition or retention

of control complies with this article and may require, as a condition of

approval of such acquisition or retention of control, that all or any

portion of such information be disclosed to the insurer's shareholders.

(e) Unless subject to registration under section one thousand five

hundred three of this article, or unless acquisition of its control is

subject to subsections (a) and (b) hereof, every authorized insurer

shall, within thirty days after any event requiring notice hereunder,

notify the superintendent in writing of the identity of any person whom

the insurer then knows or has reason to believe controls, or has taken

any action, other than preliminary negotiations or discussions, to

acquire control of the insurer.

(f) Any holding company seeking to divest its controlling interest in

a domestic insurer, in any manner, shall file with the superintendent,

with a copy to the insurer, notice of its proposed divestiture at least

thirty days prior to the cessation of control, provided, however that

this subsection shall not apply if notice is provided as required by

subsection (a) of this section.