{"data":{"id":"us-ky/krs-304.37-130","jurisdiction":"us-ky","citation":"KRS 304.37-130","heading":"Acquisition of control or merger of domestic insurers.","body":"(1) The following definitions shall apply for the purposes of this section only:\n(a) \"Acquisition\" means any agreement, arrangement, or activity the\nconsummation of which results in a person acquiring directly or indirectly the\ncontrol of another person, such as the acquisition of voting securities, the\nacquisition of assets, bulk reinsurance, and mergers; and\n(b) An \"involved insurer\" includes an insurer which either acquires or is acquired,\nis affiliated with an acquirer or acquired, or is the result of a merger.\n(2) (a) This section applies to any acquisition in which there is a change of control of\nan insurer authorized to do business in Kentucky, except as set forth in\nparagraph (b) of this subsection.\n(b) This section shall not apply to the following:\n1. An acquisition subject to approval or disapproval of the commissioner\npursuant to KRS 304.37-120;\n2. A purchase of securities solely for the investment purposes so long as\nthe securities are not used by voting or otherwise to cause or attempt to\ncause the substantial lessening of competition in any insurance market in\nKentucky. If a purchase of securities results in a presumption of control\nunder KRS 304.37 -010(3), it is not solely for investment purposes\nunless the insurance regulatory official of the insur er's state of domicile\naccepts a disclaimer of control, or affirmatively finds that control does\nnot exist, and the disclaimer action or affirmative finding is\ncommunicated by the domiciliary insurance regulatory official to the\ncommissioners;\n3. If the ac quisition of a person by another person when both persons are\nneither directly nor through affiliates primarily engaged in the business\nof insurance, if preacquisition notification is filed with the commissioner\nin accordance with subsection (3)(a) of this section thirty (30) days prior\nto the proposed effective date of the acquisition. However, the\nacquisition notification shall not be required for exclusion from this\nsection if the acquisition would otherwise be excluded from this section\nby any other subparagraph of this paragraph;\n4. The acquisition of already affiliated persons;\n5. An acquisition if, as an immediate result of the acquisition:\na. The combined market share of the involved insurers would not\nexceed five percent (5%) of the total market;\nb. There would be no increase in any market share; or\nc. The combined market share of the involved insurers would not\nexceed twelve percent (12%) of the total market; and the market\nshare would not increase by more than two percent (2%) of the\ntotal market.\nFor the purpose of this subparagraph (b)5., a market means direct\nwritten insurance premium in Kentucky for a line of business as\ncontained in the annual statement required to be filed by insurers\nauthorized to do business in Kentucky;\n6. An acquisition for which a preacquisition notification would be required\npursuant to this section due solely to the resulting effect on the ocean\nmarine insurance line of business; and\n7. An acquisition of an insurer whose domiciliary insurance regulatory\nofficial affirmatively finds that the insurer is in failing condition, there is\nlack of feasible alternative to improving the condition, the public\nbenefits of improving the insurer's condition through the acquisition\nexceed the public benefits that would arise from not l essening\ncompetition, and the findings are communicated by the domiciliary\ninsurance regulatory official to the commissioner.\n(3) An acquisition covered by subsection (2) of this section may be subject to an order\npursuant to subsection (5) of this section  or KRS 304.37 -010 unless the acquiring\nperson files a preacquisition notification and the waiting period has expired. The\nacquired person may file a preacquisition notification. The commissioner shall give\nconfidential treatment to information submitted u nder this subsection in the same\nmanner as provided in KRS 304.37-050.\n(a) The preacquisition notification shall be in the form and contain the\ninformation prescribed by the National Association of Insurance\nCommissioners relating to those markets which, u nder subsection (2)(b)5. of\nthis section, cause the acquisition not to be exempted from the provisions of\nthis section. The commissioner may require additional material and\ninformation the commissioner deems necessary to determine whether the\nproposed acquisition, if consummated, would violate the competitive standard\nof subsection (4) of this section. The required information may include an\nopinion of an economist as to the competitive impact of the acquisition in\nKentucky accompanied by a summary of the e ducation and experience of the\neconomist indicating his or her ability to render an informed opinion.\n(b) The waiting period required shall begin on the date of receipt by the\ncommissioner of a preacquisition notification and shall end on the earlier of\nthe thirtieth day after the date of receipt, or termination of the waiting period\nby the commissioner. Prior to the end of the waiting period, the commissioner\nmay, on a one -time basis, require the submission of additional needed\ninformation relevant to the proposed acquisition; if the submission is required,\nthe waiting period shall end on the earlier of the thirtieth day after receipt of\nthe additional information by the commissioner or termination of the waiting\nperiod by the commissioner.\n(4) (a) The commissioner may enter an order under subsection (5)(a) of this section\nwith respect to an acquisition if there is substantial evidence that the effect of\nthe acquisition may be to lessen substantially competition in any line of\ninsurance in Kentucky or tend t o create a monopoly, or if the insurer fails to\nfile adequate information in compliance with subsection (3) of this section.\n(b) In determining whether a proposed acquisition would violate the competitive\nstandard of paragraph (a) of this subsection, the c ommissioner shall consider\nthe following:\n1. Any acquisition covered under subsection (2) of this section involving\ntwo (2) or more insurers competing in the same market is prima facie\nevidence of violation of the competitive standards:\na. If the market is  highly concentrated and the involved insurers\npossess the following shares of the market:\nInsurer A Insurer B\n4% 4% or more\n10% 2% or more\n15% 1% or more;\nor\nb. If the market is not highly concentrated and the involved insurers\npossess the following shares of the market:\nInsurer A Insurer B\n5% 5% or more\n10% 4% or more\n15% 3% or more\n19% 1% or more.\nA highly concentrated market means one in which the share of the four\n(4) largest insurers is seventy -five percent (75%) or more of the market.\nPercentages not shown in the tables are interpolated proportionately to\nthe percentages that are shown. If more than two (2) insurers are\ninvolved, exceeding the total of the two (2) columns in the table is prima\nfacie evidence of vi olation of the competitive standard in paragraph (a)\nof this subsection. For the purpose of this subparagraph, the insurer with\nthe largest share of the market shall be deemed to be insurer A;\n2. There is a significant trend toward increased concentration when the\naggregate market share of any grouping of the largest insurers in the\nmarket, from the two (2) largest to the eight (8) largest, has increased by\nseven percent (7%) or more of the market over a period of time\nextending from any base year five (5) to ten (10) years prior to the\nacquisition up to the time of the acquisition. Any acquisition or merger\ncovered under subsection (2) of this section involving two (2) or more\ninsurers competing in  the same market is prima facie evidence of\nviolation of the competitive standard in paragraph (a) of this subsection\nif:\na. There is a significant trend toward increased concentration in the\nmarket;\nb. One of the insurers involved is one of the insurers i n a grouping of\nthe large insurers showing the requisite increase in the market\nshare; and\nc. Another involved insurer's market is two percent (2%) or more;\n3. For the purposes of subsection (4)(b) of this section:\na. The term \"insurer\" includes any compan y or group of companies\nunder common management, ownership or control;\nb. The term \"market\" means the relevant product and geographical\nmarkets. In determining the relevant product and geographical\nmarkets, the commissioner shall give due consideration to factors\nsuch as the definitions or guidelines, if any, promulgated by the\nNational Association of Insurance Commissioners and to\ninformation, if any, submitted by parties to the acquisition. In the\nabsence of sufficient information to the contrary, the rel evant\nproduct market is assumed to be the direct written insurance\npremium for a line of business, the line being that used in the\nannual statement required to be filed by insurers doing business in\nKentucky, and the relevant geographical market is assumed  to be\nKentucky; and\nc. The burden of showing prima facie evidence of violation of the\ncompetitive standard rests upon the commissioner; and\n4. Even though an acquisition is not prima facie violative of the\ncompetitive standard under paragraph (b) of this subsection, the\ncommissioner may establish the requisite anticompetitive effect based\nupon other substantial evidence. Even though an acquisition is prima\nfacie violative of the competitive standard under paragraph (b) of this\nsubsection, a party may estab lish the absence of the requisite\nanticompetitive effect based upon other substantial evidence. Relevant\nfactors in making this determination shall be such factors as market\nshares, volatility of ranking of market leaders, number of competitors,\nconcentration, trend of concentration in the industry, and ease of entry\ninto and exit from the market.\n(c) An order shall not be entered under subsection (5)(a) of this section if:\n1. The acquisition will yield substantial economies of scale or economies\nin resource utilization that cannot be feasibly achieved in any other way,\nand the public benefits which would arise from the economies exceed\nthe public benefits which would arise from not lessening competition; or\n2. The acquisition will substantially increase the  availability of insurance,\nand the public benefits of the increase exceed the public benefits which\nwould arise from not lessening competition.\n(5) (a) If an acquisition violates the standards of this section, the commissioner may\nenter an order:\n1. Requiring an involved insurer to cease and desist from doing business in\nKentucky with respect to the line or lines of insurance involved in the\nviolation; or\n2. Denying the application of an acquired or acquiring insurer for a\ncertificate of authority to do business in Kentucky.\n(b) The order referred to in paragraph (a) of this subsection shall be entered\npursuant to a hearing held under Subtitle 2 of this chapter.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=49247","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:56Z","sha256":"0856a30c35929961f9948cd4576fd5fab52a7b5c7767a7c7dd79fc8309fd0c78","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.37-120","next":"us-ky/krs-304.37-140"},"notice":"GroundRules: Original legal text. Not legal advice."}