{"data":{"id":"us-ky/krs-304.37-120","jurisdiction":"us-ky","citation":"KRS 304.37-120","heading":"Preacquisition notification -- Review -- Exceptions -- Jurisdiction of","body":"Kentucky courts.\n(1) No person other than the issuer shall make a tender offer for, a request or invitation\nfor tenders of, enter into any agreement to exchange securities, se ek to acquire, or\nacquire in the open market or otherwise, any voting security of a domestic insurer if,\nafter the consummation, the person would, directly or indirectly, or by conversion,\nor by exercise of any right to acquire, be in control of the insure r. No person shall\nenter into an agreement to merge with or to acquire control of a domestic insurer or\nany person controlling a domestic insurer unless, at the time of the offer, request, or\ninvitation is made, or any agreement is entered into, or prior t o the acquisition of\nthese securities if no offer or agreement is involved, the person has filed with the\ncommissioner and has sent to the insurer, a statement containing the information\nrequired by this section and the offer, request, invitation, agreemen t, or acquisition\nhas been approved by the commissioner in the manner prescribed in this section.\n(a) For purposes of this section a domestic insurer shall include any person\ncontrolling a domestic insurer unless the person as determined by the\ncommissioner is either directly or through its affiliates primarily engaged in\nbusiness other than the business of insurance. For the purposes of this section,\n\"person\" shall not include any securities broker holding, in the usual and\ncustomary brokers function, less  than twenty percent (20%) of the voting\nsecurities of an insurance company or of any person which controls an\ninsurance company.\n(b) For purposes of this section, any controlling person of a domestic insurer\nseeking to divest its controlling interest in t he domestic insurer, in any\nmanner, shall file with the commissioner, with a copy to the insurer,\nconfidential notice of its proposed divestiture at least thirty (30) days prior to\nthe cessation of control. The commissioner shall determine those instances in\nwhich the party seeking to divest or to acquire a controlling interest in an\ninsurer will be required to file for and obtain approval of the transaction. The\ninformation shall remain confidential until the conclusion of the transaction\nunless the commissioner, in his or her discretion, determines that confidential\ntreatment will interfere with the enforcement of this section. If the statement\nreferred to in this subsection is otherwise filed, this paragraph shall not apply.\n(c) With respect to a transaction subject to this section, the acquiring person shall\nalso file a preacquisition notification with the commissioner, which shall\ncontain the information set forth in KRS 304.37 -130. A failure to file the\nnotification may be subject to penalties specified in KRS 304.37-130.\n(2) The statement to be filed with the commissioner under this section shall be made\nunder oath or affirmation and shall contain the following information:\n(a) The name and address of each person by whom or on whose behalf the merger\nor other acquisition of control referred to in subsection (1) of this section is to\nbe effected; and\n1. If the person is an individual, his or her principal occupation and all\noffices and positions held during the past five (5) years, and any\nconviction of c rimes other than minor traffic violations during the past\nten (10) years; or\n2. If the person is not an individual, a report of the nature of its business\noperations during the past five (5) years or for a lesser period that the\nperson and any predecessors  have been in existence, an informative\ndescription of the business intended to be done by the person and the\nperson's subsidiaries, and a list of all individuals who are or who have\nbeen selected to become directors or executive officers of the person, or\nwho perform or will perform functions appropriate to these functions.\nThe list shall include for each individual the information required by\nsubparagraph 1. of this paragraph;\n(b) The source, nature, and amount of the consideration used or to be used in\neffecting the merger or other acquisition of control, a description of any\ntransaction in which funds were or are to be obtained for merger or other\nacquisition of control, including any pledge of the insurer's stock, or the stock\nof any of its subsidiaries  or controlling affiliates, and the identity of persons\nfurnishing the consideration; but if a source of the consideration is a loan\nmade in the lender's ordinary course of business, the identity of the lender\nshall remain confidential, if the person filing the statement so requests;\n(c) Fully audited financial information as to the earnings and financial condition\nof each acquiring party for the preceding five (5) fiscal years of each acquiring\nparty, or for a lesser period that the acquiring party and any  predecessors have\nbeen in existence, and similar unaudited information as of a date not earlier\nthan ninety (90) days prior to the filing of the statement;\n(d) Any plans or proposals which each acquiring party may have to liquidate the\ninsurer, to sell it s assets, or merge or consolidate it with any person, or to\nmake any other material change in its business or corporate structure or\nmanagement;\n(e) The number of shares of any security referred to in subsection (1) of this\nsection which the acquiring part y proposes to acquire, and the terms of the\noffer, request, invitation, agreement, or acquisition referred to in subsection\n(1) of this section, and a statement as to the method used to determine the\nfairness of the proposal;\n(f) The amount of each class of any security referred to in subsection (1) of this\nsection which is beneficially owned, or concerning any security referred to in\nsubsection (1) of this section which there is a right to acquire beneficial\nownership of by each acquiring party;\n(g) A full description of any contracts, arrangements, or understandings with\nrespect to any security referred to in subsection (1) of this section in which\nany acquiring party is involved, such as transfer of any of the securities, joint\nventures, loan or option arrangements, puts or calls, guarantees of loans,\nguarantees against loss or guarantees of profits, division of losses or profits, or\nthe giving or withholding of proxies. The description shall identify the persons\nwith whom these c ontracts, arrangements, or understandings have been\nentered into;\n(h) A description of the purchase of any security referred to in subsection (1) of\nthis section during the twelve (12) calendar months preceding the filing of the\nstatement by any acquiring party, including the dates of purchase, names of\nthe purchasers, and consideration paid or agreed to be paid;\n(i) A description of any recommendations to purchase any security referred to in\nsubsection (1) of this section made during the twelve (12) calend ar months\npreceding the filing of the statement, by any acquiring party, or by anyone\nbased upon interviews or at the suggestion of the acquiring party;\n(j) Copies of all tender offers for requests, or invitations for tenders of, exchange\noffers for, and a greements to acquire or exchange any securities referred to in\nsubsection (1) of this section, and of additional soliciting material distributed\nwhich relates;\n(k) The term of any agreement, contract, or understanding made with, or proposed\nto be made with any broker-dealer, as to solicitation of securities referred to in\nsubsection (1) of this section for tender, and the amount of any fees,\ncommissions, or other compensation to be paid to broker -dealers with regard\nto subsection (1) of this section;\n(l) An agreement by the person required to file the statement referred to in\nsubsection (1) of this section that it will provide the annual report specified in\nKRS 304.37-020 for so long as control exists;\n(m) An acknowledgement by the person required to file th e statement referred to\nin subsection (1) of this section that the person and all subsidiaries within its\ncontrol in the insurance holding company system will provide information to\nthe commissioner upon request as necessary to evaluate enterprise risk to the\ninsurer;\n(n) Any additional information as the commissioner may by regulation prescribe\nas necessary or appropriate for the protection of policyholders of the insurer or\nin the public interest;\n(o) If the person required to file the statement referred to in subsection (1) of this\nsection is a partnership, limited partnership, syndicate, or other group, the\ncommissioner may require that the information called for by paragraphs (a) to\n(m) of this subsection shall be given with respect to each partner of t he\npartnership or limited partnership, each member of the syndicate or other\ngroup, and each person who controls the partner or member. If any partner,\nmember, or person is a corporation, or the person required to file the statement\nreferred to in subsection (1) of this section is a corporation, the commissioner\nmay require that the information called for by paragraphs (a) to (l) of this\nsubsection shall be given with respect to the corporation, each officer and\ndirector of the corporation, and each person who is directly or indirectly the\nbeneficial owner of more than ten percent (10%) of the outstanding voting\nsecurities of the corporation; and\n(p) If any material change occurs in the facts in the statement filed with the\ncommissioner and sent to the insur er pursuant to this section, an amendment\nstating the change, with copies of all documents and other materials relevant\nto the change, shall be filed with the commissioner and sent to the insurer\nwithin two (2) business days after the person learns of the change.\n(3) If any offer, request, invitation, agreement, or acquisition referred to in subsection\n(1) of this section is proposed to be made by means of a registration statement under\nthe Securities Act of 1933, or in circumstances requiring the disclosur e of similar\ninformation under the Securities Exchange Act of 1934, or under a state law\nrequiring similar registration or disclosure, the person required to file the statement\nreferred to in subsection (1) of this section may utilize those documents in\nfurnishing the information required by the statement referred to in subsection (1) of\nthis section.\n(4) (a) The commissioner shall approve any merger or other acquisition of control\nreferred to in subsection (1) of this section unless, after a public hearing  the\ncommissioner finds that:\n1. After the change of control, the domestic insurer referred to in\nsubsection (1) of this section would not be able to satisfy the\nrequirements for issuance of a certificate of authority to write the line or\nlines of insurance for which it is presently authorized;\n2. The effect of the merger or other acquisition of control would be\nsubstantially to lessen competition in insurance in Kentucky or tend to\ncreate a monopoly. In applying the competitive standard in this\nparagraph:\na. The informational requirements of KRS 304.37 -130(3)(a) and the\nstandards of KRS 304.37-130(4)(b) shall apply;\nb. The merger or other acquisition shall not be disapproved if the\ncommissioner finds that any of the situations meeting the criteria\nprovided by KRS 304.37-130(4)(c) exist; and\nc. The commissioner may condition the approval of the merger or\nother acquisition on the removal of the basis of disapproval within\na specified period of time;\n3. The financial condition of the acquiring party might jeopa rdize the\nfinancial stability of the insurer or prejudice the interest of its\npolicyholders;\n4. The plans or proposals which the acquiring party has to liquidate the\ninsurer, sell its assets, consolidate or merge it with any person, or to\nmake any other ma terial change in its business or corporate structure or\nmanagement are unfair and unreasonable to policyholders of the insurer\nand not in the public interest;\n5. The competence, experience, and integrity of persons who would control\nthe operation of the in surer would not be in the interest of policyholders\nof the insurer and of the public to permit the merger or other acquisition\nof control; or\n6. The acquisition is likely to be hazardous or prejudicial to the insurance\nbuying public.\n(b) The public hearing  required by this section shall be conducted as directed in\nSubtitle 2 of this chapter.\n(c) The commissioner may retain at the acquiring person's expense any attorneys,\nactuaries, accountants, and other experts not otherwise a part of the\ncommissioner's st aff that may be necessary to assist the commissioner in\nreviewing the proposed acquisition of control.\n(5) The provisions of this section shall not apply to:\n(a) Any transaction which is subject to the provisions of KRS 304.24 -390,\ndealing with the merger or consolidation of a domestic insurer; or\n(b) Any offer, request, invitation, agreement, or acquisition which the\ncommissioner, by order, shall exempt from the s ection as not having been\nmade or entered into for the purpose of and not having the effect of changing\nor influencing the control of, a domestic insurer, or not comprehended within\nthe purposes of this section; or\n(c) Any acquisition of stock of a former mutual by an affiliate company that\noccurs in connection with the conversion of a mutual insurer to a stock insurer\nunder KRS 304.24 -600 to 304.24 -625, provided that no person acquires\ncontrol of the parent company. For purposes of this paragraph, \"former\nmutual\" has the meaning provided in KRS 304.24-601.\n(6) The following shall be violations of this section:\n(a) The failure to file any statement, amendment, or other material required to be\nfiled pursuant to subsection (1) or (2) of this section; or\n(b) The effectuation or any attempt to effectuate an acquisition of control of, or\nmerger with, a domestic insurer unless the commissioner has given his or her\napproval.\n(7) The courts of this state shall have jurisdiction over every person not resident,\ndomiciled, or authorized to do business in this state who files a statement with the\ncommissioner under this section, and overall actions involving such person arising\nout of violations of this section. Each person shall be deemed to have performed\nacts equivalent to and constituting an appointment by the person of the Secretary of\nState to be his or her true and lawful attorney upon whom may be served all lawful\nprocess in any action, suit, or proceeding arising out of the violations of this section.\nCopies of al l lawful process shall be served on the Secretary of State and\ntransmitted to the person at his or her last known address by the Secretary of State\nin the same manner as service of process on foreign insurers.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=40306","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:56Z","sha256":"5b5509d7f22e0ef191c8df0f2fd9d0ddad1ded20e411d8c98d71a2e178bb0eaa","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.37-110","next":"us-ky/krs-304.37-130"},"notice":"GroundRules: Original legal text. Not legal advice."}