44-6115. Anti-takeover provision; procedure.
(1)(a) Except as otherwise specifically provided in the plan of conversion, prior to and for a period of five years following the issuance of a certificate of authority to a new stock insurer under the Insurers Demutualization Act, no person other than the new stock insurer shall directly or indirectly offer to acquire or acquire in any manner the beneficial ownership of five percent or more of any class of a voting security of the new stock insurer or of any institution which owns a majority or all of the voting securities of the new stock insurer without the prior approval by the director of an application for acquisition filed by such person with the director.
(b) The director shall not approve an application for acquisition filed pursuant to subdivision (1)(a) of this section unless he or she finds that:
(i) The acquisition would not frustrate the plan of conversion as approved by the policyholders and the director;
(ii) The board of directors of the new stock insurer has approved the acquisition or extraordinary circumstances not contemplated in the plan of conversion have arisen which would warrant approval of the acquisition; and
(iii) The acquisition would be consistent with the legislative purpose of the Insurers Demutualization Act to permit conversions on terms and conditions that are fair and equitable to the policyholders.
(c) An application for acquisition filed pursuant to subsection (1) of this section shall describe in sufficient detail the information to be considered under subdivision (1)(b) of this section.
(d) If any material change occurs in the facts set forth in an application for acquisition filed pursuant to subsection (1) of this section, an amendment setting forth the change, together with copies of all documents and other material relevant to such change, shall be filed with the director.
(2) The director may hold a public hearing on an application for acquisition filed pursuant to subsection (1) of this section unless the board of directors of the new stock insurer has approved the acquisition. The public hearing shall be held within thirty days after the person seeking to acquire securities files an application for acquisition with the director pursuant to subsection (1) of this section, with at least twenty days' notice of the hearing given by the director to the person filing the application for acquisition. Not less than seven days' notice of the hearing shall be given by the person filing the application for acquisition to the new stock insurer and to such other persons as may be designated by the director. At the hearing the person filing the application for acquisition, the new stock insurer, any person to whom notice of the hearing was sent, and any other person whose interest may be affected may present evidence, examine and cross-examine witnesses, and offer oral and written arguments, and in connection therewith, may conduct discovery proceedings in the same manner as is presently allowed in the district court. All discovery proceedings shall be concluded not later than three days prior to the commencement of the hearing. If any offer or acquisition referred to in the application for acquisition is proposed by means of a registration statement under the federal Securities Act of 1933, in circumstances requiring the disclosure of similar information under the federal Securities Exchange Act of 1934, or under a state law requiring similar registration or disclosure, the person required to file the statement may utilize such documents in furnishing the information called for by the application for acquisition. The person filing the application shall serve the new stock insurer and any institution which owns a majority or all of the voting securities of the new stock insurer with a copy of the application for acquisition and any amendments thereto on the day such documents are filed with the director.
(3) The new stock insurer and any institution which owns a majority or all of the voting securities of the new stock insurer shall be permitted to become a party upon their request.
(4) The director shall make a determination within thirty days after the conclusion of the hearing or, if no hearing is held, within thirty days after the date the application for acquisition is filed with the director pursuant to subsection (1) of this section. Approval or disapproval of an application for acquisition shall be by written order. The order may be appealed to the district court of Lancaster County, and the appeal shall be in accordance with the Administrative Procedure Act.
(5) The director may retain, at the expense of the person filing an application for acquisition pursuant to subsection (1) of this section, any attorneys, actuaries, accountants, and other experts who are not employees of the Department of Insurance as may be reasonably necessary to assist the director in reviewing the application.
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