{"data":{"id":"us-ok/okla.-stat.-tit.-36-36-1634","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 36, § 36-1634","heading":"Acquisitions leading to change in control of an insurer -","body":"Exceptions - Examination by Commissioner.\n\nA. The following definitions shall apply for the purposes of\n\nthis section only:\n\n1. \"Acquisition\" means any agreement, arrangement or activity\n\nthe consummation of which results in a person acquiring directly or\n\nindirectly the control of another person, and includes but is not\n\nlimited to the acquisition of voting securities, the acquisition of\n\nassets, bulk reinsurance and mergers; and\n\n2. \"Involved insurer\" includes an insurer which acquires or is\n\nacquired, is affiliated with an acquirer or acquired, or is the\n\nresult of a merger.\n\nB. 1. Except as exempted in paragraph 2 of this subsection,\n\nthis section applies to any acquisition in which there is a change\n\nin control of an insurer authorized to do business in this state.\n\n2. This section shall not apply to the following:\n\na. a purchase of securities solely for investment\n\npurposes so long as the securities are not used by\n\nvoting or otherwise to cause or attempt to cause the\n\nsubstantial lessening of competition in any insurance\n\nmarket in this state. If a purchase of securities\n\nresults in a presumption of control under paragraph 3\n\nof Section 1 of this act, it is not solely for\n\ninvestment purposes unless the Commissioner of the\n\ninsurer's state of domicile accepts a disclaimer of\n\ncontrol or affirmatively finds that control does not\n\nexist and the disclaimer action or affirmative finding\n\nis communicated by the domiciliary Commissioner to the\n\nCommissioner of this state,\n\nb. the acquisition of a person by another person when\n\nboth persons are neither directly nor through\n\naffiliates primarily engaged in the business of\n\ninsurance, if preacquisition notification is filed\n\nwith the Commissioner in accordance with paragraph 1\n\nof subsection C of this section thirty (30) days prior\n\nto the proposed effective date of the acquisition.\n\nHowever, such preacquisition notification is not\n\nrequired for exclusion from this section if the\n\nacquisition would otherwise be excluded from the\n\nrequirements of this section by any other subparagraph\n\nof this paragraph,\n\nc. the acquisition of already affiliated persons,\n\nd. an acquisition if, as an immediate result of the\n\nacquisition,\n\n(1) in no market would the combined market share of\n\nthe involved insurers exceed five percent (5%) of\n\nthe total market,\n\n(2) there would be no increase in any market share,\n\nor\n\n(3) in no market would:\n\n(a) the combined market share of the involved\n\ninsurers exceed twelve percent (12%) of the\n\ntotal market, and\n\n(b) the market share increase by more than two\n\npercent (2%) of the total market.\n\nFor the purpose of this subparagraph, a \"market\" means\n\ndirect written insurance premium in this state for a\n\nline of business as contained in the annual statement\n\nrequired to be filed by insurers licensed to do\n\nbusiness in this state,\n\ne. an acquisition for which a preacquisition notification\n\nwould be required pursuant to this section due solely\n\nto the resulting effect on the ocean marine insurance\n\nline of business, and\n\nf. an acquisition of an insurer whose domiciliary\n\nCommissioner affirmatively finds that the insurer is\n\nin failing condition; there is a lack of feasible\n\nalternative to improving such condition; the public\n\nbenefits of improving the insurer's condition through\n\nthe acquisition exceed the public benefits that would\n\narise from not lessening competition; and the findings\n\nare communicated by the domiciliary Commissioner to\n\nthe Commissioner of this state.\n\nC. Any acquisition described in subsection B of this section\n\nmay be subject to an order pursuant to subsection E of this section\n\nunless the acquiring person files a preacquisition notification and\n\nthe waiting period has expired. The acquired person may file a\n\npreacquisition notification. The Commissioner shall give\n\nconfidential treatment to information submitted under this\nner of this state.\n\nC. Any acquisition described in subsection B of this section\n\nmay be subject to an order pursuant to subsection E of this section\n\nunless the acquiring person files a preacquisition notification and\n\nthe waiting period has expired. The acquired person may file a\n\npreacquisition notification. The Commissioner shall give\n\nconfidential treatment to information submitted under this\n\nsubsection in the same manner as provided in Section 10 of this act.\n\n1. The preacquisition notification shall be in such form and\n\ncontain such information as prescribed by the National Association\n\nof Insurance Commissioners (NAIC) relating to those markets which,\n\nunder subparagraph d of paragraph 2 of subsection B of this section,\n\ncause the acquisition not to be exempted from the provisions of this\n\nsection. The Commissioner may require such additional material and\n\ninformation as deemed necessary to determine whether the proposed\n\nacquisition, if consummated, would violate the competitive standard\n\nof subsection D of this section. The required information may\n\ninclude an opinion of an economist as to the competitive impact of\n\nthe acquisition in this state accompanied by a summary of the\n\neducation and experience of such person indicating his or her\n\nability to render an informed opinion.\n\n2. The waiting period required shall begin on the date of\n\nreceipt of the Commissioner of a preacquisition notification and\n\nshall end on the earlier of the thirtieth day after the date of\n\nreceipt, or termination of the waiting period by the Commissioner.\n\nPrior to the end of the waiting period, the Commissioner on a one-\n\ntime basis may require the submission of additional needed\n\ninformation relevant to the proposed acquisition, in which event the\n\nwaiting period shall end on the earlier of the thirtieth day after\n\nreceipt of the additional information by the Commissioner or\n\ntermination of the waiting period by the Commissioner.\n\nD. 1. The Commissioner may enter an order under paragraph 1 of\n\nsubsection E of this section with respect to an acquisition if there\n\nis substantial evidence that the effect of the acquisition may be\n\nsubstantially to lessen competition in any line of insurance in this\n\nstate or tend to create a monopoly or if the insurer fails to file\n\nadequate information in compliance with subsection C of this\n\nsection.\n\n2. In determining whether a proposed acquisition would violate\n\nthe competitive standard of paragraph 1 of this subsection, the\n\nCommissioner shall consider the following:\n\na. any acquisition covered under subsection B of this\n\nsection involving two or more insurers competing in\n\nthe same market is evidence of violation of the\n\ncompetitive standards.\n\n(1) if the market is highly concentrated and the\n\ninvolved insurers possess the following shares of\n\nthe market:\n\nInsurer A Insurer B\n\n4% 4% or more\n\n10% 2% or more\n\n15% 1% or more, or\nner shall consider the following:\n\na. any acquisition covered under subsection B of this\n\nsection involving two or more insurers competing in\n\nthe same market is evidence of violation of the\n\ncompetitive standards.\n\n(1) if the market is highly concentrated and the\n\ninvolved insurers possess the following shares of\n\nthe market:\n\nInsurer A Insurer B\n\n4% 4% or more\n\n10% 2% or more\n\n15% 1% or more, or\n\n(2) if the market is not highly concentrated and the\n\ninvolved insurers possess the following shares of\n\nthe market:\n\nInsurer A Insurer B\n\n5% 5% or more\n\n10% 4% or more\n\n15% 3% or more\n\n19% 1% or more\n\nA highly concentrated market, for purposes of this\n\nsubparagraph, is one in which the share of the four\n\nlargest insurers is seventy-five percent (75%) or more\n\nof the market. Percentages not shown in the tables\n\nare interpolated proportionately to the percentages\n\nthat are shown. If more than two insurers are\n\ninvolved, exceeding the total of the two columns in\n\nthe table is prima facie evidence of violation of the\n\ncompetitive standard in paragraph 1 of this\n\nsubsection. For the purpose of this subparagraph, the\n\ninsurer with the largest share of the market shall be\n\ndeemed to be Insurer A,\n\nb. there is a significant trend toward increased\n\nconcentration when the aggregate market share of any\n\ngrouping of the largest insurers in the market, from\n\nthe two largest to the eight largest, has increased by\n\nseven percent (7%) or more of the market over a period\n\nof time extending from any base year five (5) to ten\n\n(10) years prior to the acquisition up to the time of\n\nthe acquisition. Any acquisition or merger covered\n\nunder subsection B of Section 5 of this act involving\n\ntwo or more insurers competing in the same market is\n\nevidence of violation of the competitive standard in\n\nparagraph 1 of this subsection if:\n\n(1) there is a significant trend toward increased\n\nconcentration in the market,\n\n(2) one of the insurers involved is one of the\n\ninsurers in a grouping of large insurers showing\n\nthe requisite increase in the market share, and\n\n(3) another involved insurer's market is two percent\n\n(2%) or more,\n\nc. for the purposes of this paragraph:\n\n(1) the term \"insurer\" includes any company or group\n\nof companies under common management, ownership\n\nor control,\n\n(2) the term \"market\" means the relevant product and\n\ngeographical markets. In determining the\n\nrelevant product and geographical markets, the\n\nCommissioner shall give due consideration to,\n\namong other things, the definitions or\n\nguidelines, if any, promulgated by the NAIC and\n\nto information, if any, submitted by parties to\n\nthe acquisition. In the absence of sufficient\n\ninformation to the contrary, the relevant product\n\nmarket is assumed to be the direct written\n\ninsurance premium for a line of business, such\n\nline being that used in the annual statement\n\nrequired to be filed by insurers doing business\n\nin this state, and the relevant geographical\n\nmarket is assumed to be this state,\nif any, submitted by parties to\n\nthe acquisition. In the absence of sufficient\n\ninformation to the contrary, the relevant product\n\nmarket is assumed to be the direct written\n\ninsurance premium for a line of business, such\n\nline being that used in the annual statement\n\nrequired to be filed by insurers doing business\n\nin this state, and the relevant geographical\n\nmarket is assumed to be this state,\n\n(3) the burden of showing prima facie evidence of\n\nviolation of the competitive standard rests upon\n\nthe Commissioner, and\n\nd. even though an acquisition is not a prima facie\n\nviolation of the competitive standard under\n\nsubparagraphs a and b of this paragraph, the\n\nCommissioner may establish the requisite\n\nanticompetitive effect based upon other substantial\n\nevidence. Even though an acquisition is a prima facie\n\nviolation of the competitive standard under\n\nsubparagraphs a and b of this paragraph, a party may\n\nestablish the absence of the requisite anticompetitive\n\neffect based upon other substantial evidence.\n\nRelevant factors in making a determination under this\n\nsubparagraph include, but are not limited to, market\n\nshares, volatility of ranking of market leaders,\n\nnumber of competitors, concentration, trend of\n\nconcentration in the industry, and ease of entry and\n\nexit into the market.\n\n3. An order may not be entered under subsection E of this\n\nsection if:\n\na. the acquisition will yield substantial economies of\n\nscale or economies in resource utilization that cannot\n\nbe feasibly achieved in any other way, and the public\n\nbenefits which would arise from such economies exceed\n\nthe public benefits which would arise from not\n\nlessening competition, or\n\nb. the acquisition will substantially increase the\n\navailability of insurance, and the public benefits of\n\nthe increase exceed the public benefits which would\n\narise from not lessening competition.\n\nE. 1. a. If an acquisition violates the standards of this\n\nsection, the Commissioner may enter an order:\n\n(1) requiring an involved insurer to cease and desist\n\nfrom doing business in this state with respect to\n\nthe line or lines of insurance involved in the\n\nviolation, or\n\n(2) denying the application of an acquired or\n\nacquiring insurer for a license to do business in\n\nthis state.\n\nb. The order shall not be entered unless:\n\n(1) there is a hearing,\n\n(2) notice of the hearing is issued prior to the end\n\nof the waiting period and not less than fifteen\n\n(15) days prior to the hearing, and\n\n(3) the hearing is concluded and the order is issued\n\nno later than sixty (60) days after the date of\n\nthe filing of the preacquisition notification\n\nwith the Commissioner.\n\nc. Every order shall be accompanied by a written decision\n\nof the Commissioner setting forth findings of fact and\n\nconclusions of law.\n\nd. An order pursuant to this paragraph shall not apply if\n\nthe acquisition is not consummated.\n\n2. Any person who violates a cease and desist order of the\n\nCommissioner under paragraph 1 of this subsection and while the\n\norder is in effect may, after notice and hearing and upon order of\n\nthe Commissioner, be subject at the discretion of the Commissioner\n\nto one or more of the following:\n\na. a monetary penalty of not more than Ten Thousand\n\nDollars ($10,000.00) for every day of violation, or\n\nb. suspension or revocation of the person's license.\n\n3. Any insurer or other person who fails to make any filing\n\nrequired by this section, and who also fails to demonstrate a good-\n\nfaith effort to comply with any filing requirement, shall be subject\n\nto a fine of not more than Fifty Thousand Dollars ($50,000.00).\n\nF. Subsections B and C of Section 12 of this act and Section 14\n\nof this act shall not apply to acquisitions covered under subsection\n\nB of this section.","path":["OK Code","Title 36"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os36.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"a7d2cea34f93a07444595dad935299f807507e8440af54ec90b11238341d8f76","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-36-36-1633","next":"us-ok/okla.-stat.-tit.-36-36-1635"},"notice":"GroundRules: Original legal text. Not legal advice."}