California Code of Regulations
Title 10 - Investment
Chapter 5 - Insurance Commissioner
Subchapter 4 - Insurer Securities Permits
Article 13 - Forms and Addenda
Section 2613.02 - Application for Permit to Exchange Shares

Universal Citation: 10 CA Code of Regs 2613.02

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

For the guidance of out-of-state attorneys or other unfamiliar with the style of applications for California insurance securities permits, the following composite example of an application by a non-admitted foreign insurer for a permit to offer and exchange securities is furnished:

BEFORE THE DEPARTMENT OF INSURANCE OF THE STATE OF CALIFORNIA

In the Matter of the Application of)FILE NO.___________________________
)
ACME INSURANCE COMPANY, Nome, Alaska)ssFILED___________________________
)
For a Permit Authorizing Applicant)
to Offer and Exchange Its Shares of) APPLICATION FOR
Capital Stock) PERMIT

To the Insurance Commissioner of The State of California:

ACME INSURANCE COMPANY, an Alaskan insurer not admitted to the State of California, with its home office in The Acme Building at 100 "A" Street in the City of Nome, State of Alaska, hereby applies for a permit authorizing it to offer to the California resident shareholders of Ace Insurance Company, Fairbanks, Alaska, to exchange, not to exceed 5,000 shares of Applicant's $10.00 par value capital stock for the shares of Ace Insurance Company's $5.00 par value capital stock owned by said California shareholders, at the rate and on the basis of 1 share of Applicant's stock for each 2 shares of Ace Insurance Company stock. The present market price of Ace Insurance Company shares is $11.22 per share as shown by page 23 of Exhibit I; and the total consideration expected to be paid or exchanged for Applicant's shares pursuant to the permit applied for is $112,200. The filing fee paid herewith is calculated on the basis of said $112,200.

I

In support of this application, Applicant attaches the following exhibits, which by this reference are incorporated herein, and alleges:

A. The names and addresses of applicant's officers and directors are set forth in Exhibit A.

B. An itemized account of Applicant's financial condition showing the amount and character of its assets and liabilities is supplied in Applicant's verified Convention form annual statement as of December 31, 1965. A signed, verified copy thereof certified by the Alaska Insurance Commissioner to be a true copy of the same on file in his office is attached hereto marked Exhibit B: Applicant's financial condition has materially changed since the date of said statement on account of Applicant's merger effective January 30, 1966, with A.A.A. Insurance Company, Sitka, Alaska, with Applicant as survivor. These additional exhibits show the terms and conditions, financial details and effect of said merger:-Exhibit C, a copy of the Agreement of Merger as approved and filed with the Alaska Insurance Commissioner and bearing his original, true copy certificate to that effect.

Exhibit D, an annual statement of A.A.A. Insurance Company as of said January 30, 1966, before merger.

Exhibit E, an annual statement of Applicant as of said January 30, 1966, before merger; and Exhibit F, an annual statement of Applicant as of said January 30, 1966, after merger.

C. A detailed statement of the plan upon which Applicant transacts business is provided in last said annual statement and in the Alaska Insurance Department Report of Examination as of December 31, 1964, dated May 1, 1965, a copy of which, certified by the original certificate of the Alaska Insurance Commissioner to be a true copy of said report on file in his office, is marked Exhibit G.

D. A specimen copy of the certificate of shares of Applicant's $10.00 par value capital stock, which is the only security Applicant proposes to issue in this transaction, is marked Exhibit H.

E. There is no contract with underwriters or brokers. There will be no sale of stock for cash, merely an issue and exchange of shares of Applicant for share of Ace Insurance Company. No commissions or fees will be paid with respect to the distribution of shares asked to be authorized by the permit applied for.

F. The only writings describing the securities to be offered or other written solicitations for exchange of Applicant's shares are:

1. Exhibit I, Registration Statement, Form S-1 (including preliminary prospectus) under the Securities Act of 1933; and Exhibit J, Amendment No. 1 to said Registration Statement.

2. Exhibit K, the form of Acceptance of Offer, in duplicate.

3. Exhibit L, a letter of solicitation and transmittal of the Plan of Exchange and Acceptance of offer form by John Smith, President of Applicant herein, dated April 2, 1966, which is proposed to be mailed to all shareholders of both companies with the Prospectus on the day Applicant's registration with S.E.C. becomes effective, which is expected to be on or about April 1, 1966.

4. Exhibit M, a letter of solicitation addressed to all shareholders of Ace Insurance Company, Fairbanks, Alaska, by its President, Richard Roe, dated April 2, 1966, which is proposed to be mailed on its behalf to shareholders of record of that company.

G. A copy of Applicant's articles of incorporation as amended to date of this application, certified by the original certificate of the official custodian of the original thereof in the State of Alaska to be a true copy of the same on file in his office, is marked Exhibit N.

H. A copy of Applicant's by-laws certified over the signature of Applicant's Assistant Secretary, attested by its corporate seal, to be a true copy of the same as amended to date, is marked Exhibit O.

I. Certified copes (certified by the corporation Secretary, attested by its corporate seal) of the resolutions of applicant's Board of Directors and of its annual meeting of shareholders authorizing this offer and exchange and this application are marked Exhibits P and Q, respectively.

J. A certificate in good standing issued by the appropriate regulatory authority of Applicant's home state within 30 days prior to the filing of this application and showing that Applicant is duly authorized to transact business in that jurisdiction, is marked Exhibit R.

K. A properly executed, duly acknowledged power of attorney irrevocably appointing the California Insurance Commissioner and his successor in office as Applicant's true and lawful attorney upon whom all process in any action or proceeding against it can be served with the same effect as if the Applicant were a California Domestic insurer lawfully served with process in the State of California, is market Exhibit S. The certificate of conformity of the Clerk of an Alaska court of record as required by California Civil Code Section 1189 is attached to the Notary's certificate of acknowledgement at the foot of said power of attorney.

II

Applicant transacts multiple lines of insurance, as may be seen from its annual statement. Operations are and have been profitable. The purpose of the offering herein sought to be authorized is to acquire the shares of Ace Insurance Company and eventually merge that corporation into Applicant. Such merger will result in acquisition of additional agents and business and tend to reduce unit cost of operation. After such acquisition and merger, Applicant intends to continue to operate as at present.

III

With respect to the fairness, justness and equitableness of the ratio of exchange, reference is made to the following pages of the Plan of Exchange for comparative data about the two insurers under these topics:

History and Business....................................................p.13
Growth and Assets and Premiums Written....................................................p.14
Loss and Expense Ratios....................................................p.14
Management and Investment....................................................p.15
Balance Sheets....................................................pp. 16-17
Profit and Loss Statements....................................................pp. 18-19
Surplus Statements and Book Value....................................................pp. 20-22

See also page 23 for list of securities dealers making an over-the-counter market in the stock of either or both companies, and the bid and asked prices during the last six months.

Applicant further alleges that the price of its shares of capital stock in terms of the exchange offer is fair, just and equitable, and that the terms and conditions of the exchange offer are fair, just and equitable. According to the terms of the offer, no fractional shares will be issued. Provision is made for buying or selling fractions, as shown in the Plan of Exchange and The Acceptance of Offer form.

IV

Applicant believes that the averments made herein concerning said ACE Insurance Company are true and correct, said averments being made in reliance on information supplied by officers of said company and its officially filed reports and financial statements.

As of the end of the calendar month last preceding the filing of this application, there were, according to the books and records of the Ace Insurance Company, 110 of its stockholders with California addresses owning 9,100 shares of its capital stock. Allowing for a slight increase during the pendency of this offer as a margin of safety, Applicant needs a permit to offer not to exceed 5,000 of its shares.

* * *

WHEREFORE, Applicant respectfully requests that it be granted a permit until August 1, 1966, to offer to the California resident shareholders of Ace Insurance Company to exchange, and to exchange, in whole share lots, not to exceed 5,000 shares of Applicants' $10.00 par value capital stock for the share of the $5.00 par value capital stock of said Ace Insurance Company owned by said California stockholders on the basis and at the rate of 1 share of Applicant's stock for each 2 shares of Ace Insurance Company capital stock surrendered and tendered for exchange, fractional shares to be cared for as provided in the terms of the offer set forth in the Plan of Exchange.

Dated March 15, 1966, at Nome, Alaska.

ACME INSURANCE COMPANY

(SEAL)

By John Smith

President

Attest:

______________________________

Secretary

(Verification as in Section 2603.10, supra)

Disclaimer: These regulations may not be the most recent version. California may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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