Current through Register Vol. 41, No. 9, December 16, 2024
A. An acquisition covered by §
38.2-1323B of the Act may be subject to orders pursuant to §
38.2-1323B and C of the Code of Virginia unless the acquiring party files a pre-acquisition notification or an acquisition statement in the format prescribed by Form E of this chapter. The person being acquired may file the statement.
1. The commission may enter an order suspending the license of an insurer involved in an acquisition if there is substantial evidence that the effect of the acquisition may be substantially to lessen competition in any line of insurance in this Commonwealth or tend to create a monopoly therein, and is detrimental to policyholders or the public in general.
2. An order suspending the license may also be entered if the insurer fails to file adequate information sufficient to rebut a reasonable belief that the merger or acquisition causes or tends to cause a substantial lessening of competition in any line of insurance, and also is detrimental to policyholders or the public.
3. In determining whether competition may be detrimental, the commission shall consider, among other things, whether applicable competitive standards promulgated by the NAIC have or may be violated as a consequence of the acquisition. The standards may include any indicators of competition identified or enumerated by the NAIC in any model laws or portions of practice and procedure or instructional manuals developed to provide guidance in regulatory oversight of holding company systems, mergers and acquisitions, or competitive practices within the marketplace. The standards include the definitions, guidelines or standards embodied in any model holding company act or model holding company regulation adopted by the NAIC. In addition, the commission may request and consider the opinion of an economist as to the competitive impact of the acquisition whenever pre-acquisition notification is submitted pursuant to §
38.2-1323B of the Act.
4. An order suspending the license shall not be entered under §
38.2-1323B of the Act unless the involved insurer has received 10 days' notice and an opportunity to be heard. The notice of hearing shall be accompanied by a request for information as required by §
38.2-1324 of the Act; it may include also a request for an opinion of an economist as to the competitive impact of the acquisition.
a. Requested information shall be filed as an acquisition statement in the format of Form E of this chapter.
b. If the commission determines that the acquisition or merger causes or tends to cause a substantial lessening of competition in any line of insurance, the commission may request the insurer to furnish the additional information required by §
38.2-1324, in order to rebut the reasonable belief that the lessening of competition is detrimental to policyholders or the public in general.
5. An order suspending the license shall not be entered under §
38.2-1323B of the Code of Virginia and this section if:
a. The acquisition will yield substantial economies of scale or economies in resource utilization that cannot be feasibly achieved in any other way, and the public benefits which would arise from the economies exceed the public benefits which would arise from not lessening competition; or
b. The acquisition will substantially increase the availability of insurance, and the public benefits of the increase exceed the public benefits which would arise from not lessening competition.
6. The commission's order suspending the license entered under this section shall not become final earlier than 21 days after it is issued, during which time the involved insurer may submit a plan to remedy the anticompetitive impact of the acquisition within a reasonable time. Based upon the plan or other information, the commission shall specify the conditions, if any, under the time period during which the aspects of the acquisition causing a violation of the applicable competitive standards announced by the commission would be remedied and the order vacated or modified.
B. Any hearing held pursuant to the provisions of this section shall begin, unless waived by the insurer, within 40 days of the date of receipt by the commission of all material required by §
38.2-1323 of the Act.
C. For the purposes of this section and §
38.2-1323B of the Act, "acquisition" means any agreement, arrangement or activity the consummation of which results in a person acquiring directly or indirectly control of another person, and includes but is not limited to the acquisition of voting securities, the acquisition of assets, bulk reinsurance, and mergers.
§§
12.1-13 and 38.2-223 of the Code of Virginia.
