1999 Minnesota Statutes

CHAPTER 60D. Insurance holding company systems

  60D.01 Repealed, 1991 c 325 art 14 s 18 

    60D.02 Subdivision 1.  Repealed, 1991 c 325 art 14 s 
 18 

    Subd. 2.  Repealed, 1991 c 325 art 14 s 18 

    Subd. 3.  Repealed, 1991 c 325 art 14 s 18 

    Subd. 4.  Repealed, 1991 c 325 art 14 s 18 

    Subd. 5.  Repealed, 1991 c 58 s 16; c 325 art 14 s 18 

    Subd. 6.  Repealed, 1991 c 325 art 14 s 18 

    Subd. 7.  Repealed, 1991 c 325 art 14 s 18 

    Subd. 8.  Repealed, 1991 c 325 art 14 s 18 

  60D.03 Repealed, 1991 c 325 art 14 s 18 

  60D.04 Repealed, 1991 c 325 art 14 s 18 

  60D.05 Repealed, 1991 c 325 art 14 s 18 

  60D.06 Repealed, 1991 c 325 art 14 s 18 

  60D.07 Repealed, 1991 c 325 art 14 s 18 

  60D.08 Repealed, 1991 c 325 art 14 s 18 

     60D.09 Criminal proceedings.  

    Whenever it appears to the commissioner that any insurer or 
 any director, officer, employee or agent thereof has committed a 
 willful violation of sections 60D.15 to 60D.29, the commissioner 
 may cause criminal proceedings to be instituted by the district 
 court for the county in which the principal office of the 
 insurer is located or if such insurer has no such office in the 
 state, then by the district court for Ramsey county against such 
 insurer or the responsible director, officer, employee or agent 
 thereof.  Any person who willfully violates sections 60D.15 to 
 60D.29 shall be guilty, for the first offense, of a misdemeanor, 
 and for each subsequent offense, of a gross misdemeanor.  

    HIST: 1971 c 288 s 9; 1992 c 464 art 2 s 1 

  60D.10 Repealed, 1991 c 325 art 14 s 18 

  60D.11 Repealed, 1991 c 325 art 14 s 18 

  60D.12 Repealed, 1991 c 325 art 14 s 18 

  60D.13 Repealed, 1991 c 325 art 14 s 18 

     60D.15 Definitions. 

    Subdivision 1.    Terms.  For purposes of this chapter, 
 the terms in subdivisions 2 to 10 have the meanings given them, 
 unless the context otherwise requires. 

    Subd. 2.    Affiliate.  An "affiliate" of, or person 
 "affiliated" with, a specific person, is a person that directly, 
 or indirectly through one or more intermediaries, controls, or 
 is controlled by, or is under common control with, the person 
 specified. 

    Subd. 3.    Commissioner.  The term "commissioner" means 
 the commissioner of commerce, the commissioner's deputies, or 
 the commerce department, as appropriate. 

    Subd. 4.    Control.  The term "control," including the 
 terms "controlling," "controlled by," and "under common control 
 with," means the possession, direct or indirect, of the power to 
 direct or cause the direction of the management and policies of 
 a person, whether through the ownership of voting securities, by 
 contract other than a commercial contract for goods or 
 nonmanagement services, or otherwise, unless the power is the 
 result of an official position with, corporate office held by, 
 or court appointment of, the person.  Control is presumed to 
 exist if any person, directly or indirectly, owns, controls, 
 holds with the power to vote, or holds proxies representing, ten 
 percent or more of the voting securities of any other person.  
 This presumption may be rebutted by a showing made in the manner 
 provided by section 60D.19, subdivision 11, that control does 
 not exist in fact.  The commissioner may determine, after 
 furnishing all persons in interest notice and opportunity to be 
 heard and making specific findings of fact to support such 
 determination, that control exists in fact, notwithstanding the 
 absence of a presumption to that effect. 

    Subd. 5.    Insurance holding company system.  An 
 "insurance holding company system" consists of two or more 
 affiliated persons, one or more of which is an insurer. 

    Subd. 6.    Insurer.  The term "insurer" means a company 
 qualified and licensed by the commissioner to transact the 
 business of insurance, but does not include an insurance 
 solicitor, agent, or agency.  The term also does not include: 

    (1) agencies, authorities, or instrumentalities of the 
 United States, its possessions and territories, the commonwealth 
 of Puerto Rico, the District of Columbia, or a state or 
 political subdivision of a state; or 

    (2) nonprofit medical and hospital service associations. 

    Subd. 7.    Person.  A "person" is an individual, a 
 corporation, a partnership, an association, a joint stock 
 company, a trust, an unincorporated organization, any similar 
 entity or any combination of the foregoing acting in concert, 
 but does not include any joint venture partnership exclusively 
 engaged in owning, managing, leasing, or developing real or 
 tangible personal property. 

    Subd. 8.    Security holder.  A "security holder" of a 
 specified person is one who owns any security of the person, 
 including common stock, preferred stock, debt obligations, and 
 any other security convertible into or evidencing the right to 
 acquire any security of the person. 

    Subd. 9.    Subsidiary.  A "subsidiary" of a specified 
 person is an affiliate controlled by the person directly or 
 indirectly through one or more intermediaries. 

    Subd. 10.    Voting security.  The term "voting security"
 includes any security convertible into or evidencing a right to 
 acquire a voting security. 

    HIST: 1991 c 325 art 14 s 2; 1992 c 564 art 1 s 27 

     60D.16 Subsidiaries of insurers. 

    Subdivision 1.    Authorization.  A domestic insurer, 
 either by itself or in cooperation with one or more persons, may 
 organize or acquire one or more subsidiaries engaged in the 
 following kinds of business: 

    (1) any kind of insurance business authorized by the 
 jurisdiction in which it is incorporated; 

    (2) acting as an insurance broker or as an insurance agent 
 for its parent or for any of its parent's insurer subsidiaries; 

    (3) investing, reinvesting, or trading in securities for 
 its own account, that of its parent, any subsidiary of its 
 parent, or any affiliate or subsidiary; 

    (4) management of any investment company subject to or 
 registered pursuant to the Investment Company Act of 1940, as 
 amended, including related sales and services; 

    (5) acting as a broker-dealer subject to or registered 
 pursuant to the Securities Exchange Act of 1934, as amended; 

    (6) rendering investment advice to governments, government 
 agencies, corporations, or other organizations or groups; 

    (7) rendering other services related to the operations of 
 an insurance business including, but not limited to, actuarial, 
 loss prevention, safety engineering, data processing, 
 accounting, claims, appraisal, and collection services; 

    (8) ownership and management of assets that the parent 
 corporation could itself own or manage; 

    (9) acting as administrative agent for a governmental 
 instrumentality which is performing an insurance function; 

    (10) financing of insurance premiums, agents, and other 
 forms of consumer financing; 

    (11) any other business activity determined by the 
 commissioner to be reasonably ancillary to an insurance 
 business; and 

    (12) owning a corporation or corporations engaged or 
 organized to engage exclusively in one or more of the businesses 
 specified in this section. 

    Subd. 2.    Additional investment authority.  In 
 addition to investments in common stock, preferred stock, debt 
 obligations, and other securities otherwise permitted, a 
 domestic insurer may also: 

    (a) Invest, in common stock, preferred stock, debt 
 obligations, and other securities of one or more subsidiaries, 
 amounts that do not exceed the lesser of ten percent of the 
 insurer's assets or 50 percent of the insurer's surplus as 
 regards policyholders, provided that after the investments, the 
 insurer's surplus as regards policyholders will be reasonable in 
 relation to the insurer's outstanding liabilities and adequate 
 to its financial needs.  In calculating the amount of these 
 investments, investments in domestic or foreign insurance 
 subsidiaries must be excluded, and there must be included: 

    (1) total net money or other consideration expended and 
 obligations assumed in the acquisition or formation of a 
 subsidiary, including all organizational expenses and 
 contributions to capital and surplus of the subsidiary whether 
 or not represented by the purchase of capital stock or issuance 
 of other securities; and 

    (2) all amounts expended in acquiring additional common 
 stock, preferred stock, debt obligations, and other securities 
 and all contributions to the capital or surplus, of a subsidiary 
 subsequent to its acquisition or formation. 

    (b) Invest any amount in common stock, preferred stock, 
 debt obligations, and other securities of one or more 
 subsidiaries engaged or organized to engage exclusively in the 
 ownership and management of assets authorized as investments for 
 the insurer provided that the subsidiary agrees to limit its 
 investments in any asset so that the investments will not cause 
 the amount of the total investment of the insurer to exceed any 
 of the investment limitations specified in paragraph (a) or 
 other statutes applicable to the insurer.  For the purpose of 
 this paragraph, "the total investment of the insurer" includes: 

    (1) any direct investment by the insurer in an asset; and 

    (2) the insurer's proportionate share of any investment in 
 an asset by any subsidiary of the insurer, which must be 
 calculated by multiplying the amount of the subsidiary's 
 investment by the percentage of the ownership of the subsidiary. 

    (c) With the approval of the commissioner, invest any 
 greater amount in common stock, preferred stock, debt 
 obligations, or other securities of one or more subsidiaries, if 
 after the investment the insurer's surplus as regards 
 policyholders will be reasonable in relation to the insurer's 
 outstanding liabilities and adequate to its financial needs. 

    Subd. 3.    Exemption from investment restrictions.  
 Investments in common stock, preferred stock, debt obligations, 
 or other securities of subsidiaries made pursuant to subdivision 
 2 are not subject to any of the otherwise applicable 
 restrictions or prohibitions applicable to these investments of 
 insurers. 

    Subd. 4.    Qualification of investment; when determined. 
  Whether any investment pursuant to subdivision 2 meets the 
 applicable requirements is to be determined before the 
 investment is made, by calculating the applicable investment 
 limitations as though the investment had already been made, 
 taking into account the then outstanding principal balance on 
 all previous investments in debt obligations, and the value of 
 all previous investments in equity securities as of the day they 
 were made, net of any return of capital invested, not including 
 dividends. 

    Subd. 5.    Cessation of control.  If an insurer ceases 
 to control a subsidiary, it shall dispose of any investment in 
 it made pursuant to this section within three years from the 
 time of the cessation of control or within any further time the 
 commissioner prescribes, unless at any time after the investment 
 has been made, the investment meets the requirements for 
 investment under any other provision of law, and the insurer has 
 notified the commissioner of this fact. 

    HIST: 1991 c 325 art 14 s 3 

     60D.17 Acquisition of control of or merger with domestic 
  insurer. 

    Subdivision 1.    Filing requirements.  No person other 
 than the issuer shall:  (1) make a tender offer for or a request 
 or invitation for tenders of, or enter into any agreement to 
 exchange securities or, seek to acquire, or acquire, in the open 
 market or otherwise, any voting security of a domestic insurer 
 if, after the consummation thereof, the person would, directly 
 or indirectly, or by conversion or by exercise of any right to 
 acquire, be in control of the insurer; or (2) enter into an 
 agreement to merge with or otherwise to acquire control of a 
 domestic insurer or any person controlling a domestic insurer 
 unless, at the time the offer, request, or invitation is made or 
 the agreement is entered into, or before the acquisition of the 
 securities if no offer or agreement is involved, the person has 
 filed with the commissioner and has sent to the insurer, a 
 statement containing the information required by this section 
 and the offer, request, invitation, agreement, or acquisition 
 has been approved by the commissioner in the manner prescribed 
 in this section. 

    For purposes of this section, a domestic insurer includes a 
 person controlling a domestic insurer unless the person as 
 determined by the commissioner is either directly or through its 
 affiliates primarily engaged in business other than the business 
 of insurance.  However, the person shall file a preacquisition 
 notification with the commissioner containing the information 
 set forth in section 60D.18, subdivision 3, paragraph (b), 30 
 days before the proposed effective date of the acquisition.  
 Failure to file is subject to section 60D.18, subdivision 5.  
 For the purposes of this section, "person" does not include any 
 securities broker holding, in the usual and customary brokers 
 function, less than 20 percent of the voting securities of an 
 insurance company or of any person that controls an insurance 
 company. 

    Subd. 2.    Content of statement.  The statement to be 
 filed with the commissioner shall be made under oath or 
 affirmation and shall contain the following information: 

    (a) The name and address of each person by whom or on whose 
 behalf the merger or other acquisition of control referred to in 
 subdivision 1 is to be effected, hereinafter called "acquiring 
 party"; and 

    (1) if the person is an individual, the principal 
 occupation and all offices and positions held during the past 
 five years, and any conviction of crimes other than minor 
 traffic violations during the past ten years; and 

    (2) if the person is not an individual, a report of the 
 nature of its business operations during the past five years or 
 for a lesser period as the person and any predecessors have been 
 in existence; an informative description of the business 
 intended to be done by the person and the person's subsidiaries; 
 and a list of all individuals who are or who have been selected 
 to become directors or executive officers of such person, or who 
 perform or will perform functions appropriate to such 
 positions.  The list must include for each individual the 
 information required by clause (1). 

    (b) The source, nature, and amount of the consideration 
 used or to be used in effecting the merger or other acquisition 
 of control, a description of any transaction in which funds were 
 or are to be obtained for this purpose, including any pledge of 
 the insurer's stock, or the stock of any of its subsidiaries or 
 controlling affiliates, and the identity of persons furnishing 
 the consideration, provided, however, that where a source of the 
 consideration is a loan made in the lender's ordinary course of 
 business, the identity of the lender shall remain confidential, 
 if the person filing the statement so requests. 

    (c) Fully audited financial information as to the earnings 
 and financial condition of each acquiring party for the 
 preceding five fiscal years of each acquiring party, or for a 
 lesser period as the acquiring party and any predecessors have 
 been in existence, and similar unaudited information as of a 
 date not earlier than 90 days before the filing of the statement.

    (d) Any plans or proposals that each acquiring party may 
 have to liquidate the insurer, to sell its assets or merge or 
 consolidate it with any person, or to make any other material 
 change in its business or corporate structure or management. 

    (e) The number of shares of any security referred to in 
 subdivision 1 that each acquiring party proposes to acquire, and 
 the terms of the offer, request, invitation, agreement, or 
 acquisition referred to in subdivision 1. 

    (f) The amount of each class of any security referred to in 
 subdivision 1 that is beneficially owned or concerning which 
 there is a right to acquire beneficial ownership by each 
 acquiring party. 

    (g) A full description of any contracts, arrangements, or 
 understandings with respect to any security referred to in 
 subdivision 1 in which any acquiring party is involved, 
 including but not limited to, transfer of any of the securities, 
 joint ventures, loan or option arrangements, puts or calls, 
 guarantees of loans, guarantees against loss or guarantees of 
 profits, division of losses or profits, or the giving or 
 withholding of proxies.  The description must identify the 
 persons with whom the contracts, arrangements, or understandings 
 have been entered into. 

    (h) A description of the purchase of any security referred 
 to in subdivision 1 during the 12 calendar months preceding the 
 filing of the statement, by any acquiring party, including the 
 dates of purchase, names of the purchasers, and consideration 
 paid or agreed to be paid for it. 

    (i) A description of any recommendations to purchase any 
 security referred to in subdivision 1 made during the 12 
 calendar months preceding the filing of the statement, by any 
 acquiring party, or by anyone based upon interviews or at the 
 suggestion of the acquiring party. 

    (j) Copies of all tender offers for, requests, or 
 invitations for tenders of, exchange offers for, and agreements 
 to acquire or exchange any securities referred to in subdivision 
 1 and, if distributed, of additional soliciting material 
 relating to them. 

    (k) The term of any agreement, contract, or understanding 
 made with or proposed to be made with any broker-dealer as to 
 solicitation of securities referred to in subdivision 1 for 
 tender, and the amount of any fees, commissions, or other 
 compensation to be paid to broker-dealers with regard to it. 

    (l) Additional information the commissioner may by rule 
 prescribe as necessary or appropriate for the protection of 
 policyholders of the insurer or in the public interest. 

    If the person required to file the statement referred to in 
 subdivision 1 is a partnership, limited partnership, syndicate, 
 or other group, the commissioner may require that the 
 information called for by paragraphs (a) to (l) must be given 
 with respect to each partner of the partnership or limited 
 partnership, each member of the syndicate or group, and each 
 person who controls the partner or member.  If a partner, 
 member, or person is a corporation, or the person required to 
 file the statement referred to in subdivision 1 is a corporation 
 the commissioner may require that the information called for by 
 paragraphs (a) to (l) be given with respect to the corporation, 
 each officer and director of the corporation, and each person 
 who is directly or indirectly the beneficial owner of more than 
 ten percent of the outstanding voting securities of the 
 corporation. 

    If any material change occurs in the facts set forth in the 
 statement filed with the commissioner and sent to the insurer 
 pursuant to this section, an amendment setting forth the change, 
 together with copies of all documents and other material 
 relevant to the change, must be filed with the commissioner and 
 sent to the insurer within two business days after the person 
 learns of the change. 

    Subd. 3.    Alternative filing materials.  If any offer, 
 request, invitation, agreement, or acquisition referred to in 
 subdivision 1 is proposed to be made by means of a registration 
 statement under the Securities Act of 1933, or in circumstances 
 requiring the disclosure of similar information under the 
 Securities Exchange Act of 1934, or under a state law requiring 
 similar registration or disclosure, the person required to file 
 the statement referred to in subdivision 1 may utilize these 
 documents in furnishing the information called for by that 
 statement. 

    Subd. 4.    Approval by commissioner; hearings.  (a) The 
 commissioner shall approve any merger or other acquisition of 
 control referred to in subdivision 1 unless, after a public 
 hearing, the commissioner finds that: 

    (1) After the change of control, the domestic insurer 
 referred to in subdivision 1 would not be able to satisfy the 
 requirements for the issuance of a license to write the line or 
 lines of insurance for which it is presently licensed, unless 
 the domestic insurer is in rehabilitation or other court-ordered 
 supervision and the acquiring party commits to a plan that would 
 enable the domestic insurer to satisfy the requirements for the 
 issuance of a license within a reasonable amount of time; 

    (2) The effect of the merger or other acquisition of 
 control would be substantially to lessen competition in 
 insurance in this state or tend to create a monopoly therein in 
 applying the competitive standard in this subdivision: 

    (i) the informational requirements of section 60D.18, 
 subdivision 3, paragraph (b), and the standards of section 
 60D.18, subdivision 4, paragraph (c), shall apply; 

    (ii) the merger or other acquisition shall not be 
 disapproved if the commissioner finds that any of the situations 
 meeting the criteria provided by section 60D.18, subdivision 4, 
 paragraph (c), exist; and 

    (iii) the commissioner may condition the approval of the 
 merger or other acquisition on the removal of the basis of 
 disapproval within a specified period of time; 

    (3) The financial condition of any acquiring party is such 
 as might jeopardize the financial stability of the insurer, or 
 prejudice the interest of its policyholders; 

    (4) The plans or proposals that the acquiring party has to 
 liquidate the insurer, sell its assets, or consolidate or merge 
 it with any person, or to make any other material change in its 
 business or corporate structure or management, are unfair and 
 unreasonable to policyholders of the insurer and not in the 
 public interest; 

    (5) The competence, experience, and integrity of those 
 persons who would control the operation of the insurer are such 
 that it would not be in the interest of policyholders of the 
 insurer and of the public to permit the merger or other 
 acquisition of control; or 

    (6) The acquisition is likely to be hazardous or 
 prejudicial to the insurance buying public. 

    (b) The public hearing referred to in paragraph (a) must be 
 held 30 days after the statement required by subdivision 1 is 
 filed, and at least 20 days' notice of it shall be given by the 
 commissioner to the person filing the statement.  Not less than 
 seven days notice of the public hearing shall be given by the 
 person filing the statement to the insurer and to other persons 
 designated by the commissioner.  The commissioner shall make a 
 determination within 30 days after the conclusion of the 
 hearing.  At the hearing, the person filing the statement, the 
 insurer, any person to whom notice of hearing was sent, and any 
 other person whose interest may be affected by it may present 
 evidence, examine and cross-examine witnesses, and offer oral 
 and written arguments and may conduct discovery proceedings in 
 the same manner as is presently allowed in the district courts 
 of this state.  All discovery proceedings must be concluded not 
 later than three days before the start of the public hearing. 

    (c) The commissioner may retain at the acquiring person's 
 expense any attorneys, actuaries, accountants, and other experts 
 not otherwise a part of the commissioner's staff as may be 
 reasonably necessary to assist the commissioner in reviewing the 
 proposed acquisition of control. 

    Subd. 5.    Exemptions.  This section does not apply to: 

    (1) Any transaction that is subject to section 60A.16, 
 dealing with the merger or consolidation of two or more insurers.

    (2) Any offer, request, invitation, agreement, or 
 acquisition that the commissioner by order exempts from this 
 section as (i) not having been made or entered into for the 
 purpose and not having the effect of changing or influencing the 
 control of a domestic insurer, or (ii) as otherwise not 
 comprehended within the purposes of this section. 

    Subd. 6.    Violations.  The following are violations of 
 this section: 

    (1) the failure to file any statement, amendment, or other 
 material required to be filed pursuant to subdivision 1 or 2; or 

    (2) the effectuation or any attempt to effectuate an 
 acquisition of control of, or merger with, a domestic insurer 
 unless the commissioner has approved it. 

    Subd. 7.    Jurisdiction, consent to service of process. 
  The courts of this state have jurisdiction over every person 
 not resident, domiciled, or authorized to do business in this 
 state who files a statement with the commissioner under this 
 section, and overall actions involving the person arising out of 
 violations of this section, and the person is deemed to have 
 performed acts equivalent to and constituting an appointment by 
 the person of the commissioner to be the person's true and 
 lawful attorney upon whom may be served all lawful process in 
 any action, suit, or proceeding arising out of violations of 
 this section.  Copies of all lawful process shall be served on 
 the commissioner and transmitted by registered or certified mail 
 by the commissioner to the person at the person's last known 
 address. 

    HIST: 1991 c 325 art 14 s 4; 1992 c 540 art 2 s 12; 1992 c 564 
 art 1 s 28 

     60D.18 Acquisitions involving insurers not otherwise 
  covered. 

    Subdivision 1.    Definitions.  The following 
 definitions apply for the purposes of this section only: 

    (a) "Acquisition" means an agreement, arrangement, or 
 activity the consummation of which results in a person acquiring 
 directly or indirectly the control of another person, and 
 includes, but is not limited to, the acquisition of voting 
 securities, the acquisition of assets, bulk reinsurance, and 
 mergers. 

    (b) An "involved insurer" includes an insurer that either 
 acquires or is acquired, is affiliated with an acquirer or 
 acquired, or is the result of a merger. 

    Subd. 2.    Scope.  (a) Except as exempted in paragraph 
 (b), this section applies to any acquisition in which there is a 
 change in control of an insurer authorized to do business in 
 this state. 

    (b) This section does not apply to the following: 

    (1) an acquisition subject to approval or disapproval by 
 the commissioner pursuant to section 60D.17; 

    (2) a purchase of securities solely for investment purposes 
 so long as such securities are not used by voting or otherwise 
 to cause or attempt to cause the substantial lessening of 
 competition in any insurance market in this state.  If a 
 purchase of securities results in a presumption of control under 
 section 60D.15, subdivision 4, it is not solely for investment 
 purposes unless the commissioner of the insurer's state of 
 domicile accepts a disclaimer of control or affirmatively finds 
 that control does not exist and such disclaimer action or 
 affirmative finding is communicated by the domiciliary 
 commissioner to the commissioner of this state; 

    (3) the acquisition of a person by another person when both 
 persons are neither directly nor through affiliates primarily 
 engaged in the business of insurance, if preacquisition 
 notification is filed with the commissioner in accordance with 
 subdivision 3, paragraph (a), 30 days before the proposed 
 effective date of the acquisition.  However, the preacquisition 
 notification is not required for exclusion from this section, if 
 the acquisition would otherwise be excluded from this section by 
 any other clause of this paragraph; 

    (4) the acquisition of already affiliated persons; 

    (5) an acquisition if, as an immediate result of the 
 acquisition; 

    (i) in no market would the combined market share of the 
 involved insurers exceed five percent of the total market; 

    (ii) there would be no increase in any market share; or 

    (iii) in no market would the combined market share of the 
 involved insurers exceed 12 percent of the total market; and the 
 market share increases by more than two percent of the total 
 market. 

    For the purpose of this clause, a market means direct 
 written insurance premium in this state for a line of business 
 as contained in the annual statement required to be filed by 
 insurers licensed to do business in this state; 

    (6) an acquisition for which a preacquisition notification 
 would be required pursuant to this section due solely to the 
 resulting effect on the ocean marine insurance line of business; 
 and 

    (7) an acquisition of an insurer whose domiciliary 
 commissioner affirmatively finds that the insurer is in failing 
 condition; there is a lack of feasible alternative to improving 
 the condition; the public benefits of improving the insurer's 
 condition through the acquisition exceed the public benefits 
 that would arise from not lessening competition; and the 
 findings are communicated by the domiciliary commissioner to the 
 commissioner of this state. 

    Subd. 3.    Preacquisition notification; waiting period. 
  (a) An acquisition covered by subdivision 2 may be subject to 
 an order pursuant to subdivision 4 unless the acquiring person 
 files a preacquisition notification and the waiting period has 
 expired.  The acquired person may file a preacquisition 
 notification.  The commissioner shall give confidential 
 treatment to information submitted under this section in the 
 same manner as provided in section 60D.22.  

    (b) The preacquisition notification must be in the form and 
 contain the information as prescribed by the National 
 Association of Insurance Commissioners relating to those markets 
 that, under subdivision 2, paragraph (b), clause (5), cause the 
 acquisition not to be exempted from the provisions of this 
 section.  The commissioner may require the additional material 
 and information as the commissioner deems necessary to determine 
 whether the proposed acquisition, if consummated, would violate 
 the competitive standard of subdivision 4.  The required 
 information may include an opinion of an economist as to the 
 competitive impact of the acquisition in this state accompanied 
 by a summary of the education and experience of the person 
 indicating that person's ability to render an informed opinion. 

    (c) The waiting period required begins on the date of 
 receipt of the commissioner of a preacquisition notification and 
 ends on the earlier of the 30th day after the date of its 
 receipt, or termination of the waiting period by the 
 commissioner.  Before the end of the waiting period, the 
 commissioner on a one-time basis may require the submission of 
 additional needed information relevant to the proposed 
 acquisition, in which event the waiting period shall end on the 
 earlier of the 30th day after receipt of the additional 
 information by the commissioner or termination of the waiting 
 period by the commissioner. 

    Subd. 4.    Competitive standard.  (a) The commissioner 
 may enter an order under subdivision 5 with respect to 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 state or tend to create a monopoly 
 therein or if the insurer fails to file adequate information in 
 compliance with subdivision 3. 

    (b) In determining whether a proposed acquisition would 
 violate the competitive standard of paragraph (a), the 
 commissioner shall consider the following: 

    (1) any acquisition covered under subdivision 2 involving 
 two or more insurers competing in the same market is prima facie 
 evidence of violation of the competitive standards: 

    (i) if the market is highly concentrated and the involved 
 insurers possess the following shares of the market: 

            INSURER A             INSURER B

            4 percent             4 percent or more

            10 percent            2 percent or more

            15 percent            1 percent or more

    (ii) or, if the market is not highly concentrated and the 
 involved insurers possess the following shares of the market: 

            INSURER A             INSURER B

            5 percent             5 percent or more

            10 percent            4 percent or more

            15 percent            3 percent or more

            19 percent            1 percent or more

    A highly concentrated market is one in which the share of 
 the four largest insurers is 75 percent or more of the market.  
 Percentages not shown in the tables are interpolated 
 proportionately to the percentages that are shown.  If more than 
 two insurers are involved, exceeding the total of the two 
 columns in the table is prima facie evidence of violation of the 
 competitive standard in paragraph (a).  For the purpose of this 
 clause, the insurer with the largest share of the market shall 
 be deemed to be insurer A. 

    (2) There is a significant trend toward increased 
 concentration when the aggregate market share of any grouping of 
 the largest insurers in the market, from the two largest to the 
 eight largest, has increased by seven percent or more of the 
 market over a period of time extending from any base year five 
 to ten years prior to the acquisition up to the time of the 
 acquisition.  Any acquisition or merger covered under 
 subdivision 2 involving two or more insurers competing in the 
 same market is prima facie evidence of violation of the 
 competitive standard in clause (1) if: 

    (i) there is a significant trend toward increased 
 concentration in the market; 

    (ii) one of the insurers involved is one of the insurers in 
 a grouping of such large insurers showing the requisite increase 
 in the market share; and 

    (iii) another involved insurer's market is two percent or 
 more. 

    (3) For the purposes of paragraph (b): 

    (i) The term "insurer" includes any company or group of 
 companies under common management, ownership, or control. 

    (ii) The term "market" means the relevant product and 
 geographical markets.  In determining the relevant product and 
 geographical markets, the commissioner shall give due 
 consideration to, among other things, the definitions or 
 guidelines, if any, promulgated by the National Association of 
 Insurance Commissioners and to information, if any, submitted by 
 parties to the acquisition.  In the absence of sufficient 
 information to the contrary, the relevant product market is 
 assumed to be the direct written insurance premium for a line of 
 business, the line being that used in the annual statement 
 required to be filed by insurers doing business in this state, 
 and the relevant geographical market is assumed to be this state.

    (iii) The burden of showing prima facie evidence of 
 violation of the competitive standard rests upon the 
 commissioner. 

    (iv) Even though an acquisition is not prima facie 
 violative of the competitive standard under paragraph (b), 
 clauses (1) and (2), the commissioner may establish the 
 requisite anticompetitive effect based upon other substantial 
 evidence.  Even though an acquisition is prima facie violative 
 of the competitive standard under paragraph (b), clauses (1) and 
 (2), a party may establish the absence of the requisite 
 anticompetitive effect based upon other substantial evidence.  
 Relevant factors in making a determination under this paragraph 
 include, but are not limited to, the following:  market shares, 
 volatility of ranking of market leaders, number of competitors, 
 concentration, trend of concentration in the industry, and ease 
 of entry and exit into the market. 

    (c) An order may not be entered under subdivision 5 if: 

    (1) 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 such economies exceed the public benefits 
 which would arise from not lessening competition; or 

    (2) the acquisition will substantially increase the 
 availability of insurance, and the public benefits of such 
 increase exceed the public benefits which would arise from not 
 lessening competition. 

    Subd. 5.    Orders and penalties.  If an acquisition 
 violates the standards of this section, the commissioner may 
 enter an order: 

    (1) requiring an involved insurer to cease and desist from 
 doing business in this state with respect to the line or lines 
 of insurance involved in the violation; or 

    (2) denying the application of an acquired or acquiring 
 insurer for a license to do business in this state. 

    The order must not be entered unless there is a hearing, 
 the notice of the hearing is issued before the end of the 
 waiting period and not less than 15 days before the hearing, and 
 the hearing is concluded and the order is issued no later than 
 60 days after the end of the waiting period.  Every order must 
 be accompanied by a written decision of the commissioner setting 
 forth findings of fact and conclusions of law. 

    An order entered under this paragraph shall not become 
 final earlier than 30 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 
 commissioner shall specify the conditions, if any, under the 
 time period during which the aspects of the acquisition causing 
 a violation of the standards of this section would be remedied 
 and the order vacated or modified. 

    An order pursuant to this subdivision does not apply if the 
 acquisition is not consummated. 

    Any person who violates a cease and desist order of the 
 commissioner and while the order is in effect, may after notice 
 and hearing and upon order of the commissioner, be subject at 
 the discretion of the commissioner to any one or more of the 
 following: 

    (1) a monetary penalty of not more than $10,000 for every 
 day of violation; 

    (2) suspension or revocation of the person's license. 

    Any insurer or other person who fails to make any filing 
 required by this section and who also fails to demonstrate a 
 good faith effort to comply with the filing requirement, is 
 subject to a fine of not more than $50,000. 

    Subd. 6.    Inapplicable provisions.  Sections 60D.24, 
 paragraphs (b) and (c); and 60D.26 do not apply to acquisitions 
 covered under subdivision 2. 

    HIST: 1991 c 325 art 14 s 5 

     60D.19 Registration of insurers. 

    Subdivision 1.    Registration.  Every insurer that is 
 authorized to do business in this state and that is a member of 
 an insurance holding company system shall register with the 
 commissioner, except a foreign insurer subject to registration 
 requirements and standards adopted by statute or regulation in 
 the jurisdiction of its domicile that are substantially similar 
 to those contained in: 

    (1) this section; 

    (2) section 60D.20, subdivisions 1, paragraph (a); 2; and 
 4; and 

    (3) either section 60D.20, subdivision 1, paragraph (b), or 
 a provision such as the following:  Each registered insurer 
 shall keep current the information required to be disclosed in 
 its registration statement by reporting all material changes or 
 additions within 15 days after the end of the month in which it 
 learns of each such change or addition. 

    Any insurer that is subject to registration under this 
 section shall register within 15 days after it becomes subject 
 to registration, and annually thereafter by March 1 of each year 
 for the previous calendar year, unless the commissioner for good 
 cause shown extends the time for registration, and then within 
 such extended time.  The commissioner may require any insurer 
 authorized to do business in the state that is a member of a 
 holding company system, and that is not subject to registration 
 under this section, to furnish a copy of the registration 
 statement, the summary specified in subdivision 3 or other 
 information filed by the insurance company with the insurance 
 regulatory authority of domiciliary jurisdiction. 

    Subd. 2.    Information and form required.  Every 
 insurer subject to registration shall file the registration 
 statement on a form prescribed by the National Association of 
 Insurance Commissioners, which shall contain the following 
 current information: 

    (1) the capital structure, general financial condition, 
 ownership, and management of the insurer and any person 
 controlling the insurer; 

    (2) the identity and relationship of every member of the 
 insurance holding company system; 

    (3) the following agreements in force, and transactions 
 currently outstanding or that have occurred during the last 
 calendar year between the insurer and its affiliates: 

    (i) loans, other investments, or purchases, sales, or 
 exchanges of securities of the affiliates by the insurer or of 
 the insurer by its affiliates; 

    (ii) purchases, sales, or exchange of assets; 

    (iii) transactions not in the ordinary course of business; 

    (iv) guarantees or undertakings for the benefit of an 
 affiliate which result in an actual contingent exposure of the 
 insurer's assets to liability, other than insurance contracts 
 entered into in the ordinary course of the insurer's business; 

    (v) all management agreements, service contracts, and all 
 cost-sharing arrangements; 

    (vi) reinsurance agreements; 

    (vii) dividends and other distributions to shareholders; 
 and 

    (viii) consolidated tax allocation agreements; 

    (4) any pledge of the insurer's stock, including stock of 
 any subsidiary or controlling affiliate, for a loan made to any 
 member of the insurance holding company system; and 

    (5) other matters concerning transactions between 
 registered insurers and any affiliates as may be included from 
 time to time in any registration forms adopted or approved by 
 the commissioner. 

    Subd. 3.    Summary of registration statement.  All 
 registration statements must contain a summary outlining all 
 items in the current registration statement representing changes 
 from the prior registration statement. 

    Subd. 4.    Materiality.  No information need be 
 disclosed on the registration statement filed pursuant to 
 subdivision 2 if the information is not material for the 
 purposes of this section. Unless the commissioner by rule or 
 order provides otherwise; sales, purchases, exchanges, loans or 
 extensions of credit, investments, or guarantees involving 
 one-half of one percent or less of an insurer's admitted assets 
 as of the 31st day of December next preceding shall not be 
 deemed material for purposes of this section. 

    Subd. 5. Repealed, 1994 c 425 s 18 

    Subd. 6.    Information of insurers.  Any person within 
 an insurance holding company system subject to registration 
 shall be required to provide complete and accurate information 
 to an insurer where such information is reasonably necessary to 
 enable the insurer to comply with the provisions of this chapter.

    Subd. 7.    Termination of registration.  The 
 commissioner shall terminate the registration of any insurer 
 which demonstrates that it no longer is a member of an insurance 
 holding company system. 

    Subd. 8.    Consolidated filing.  The commissioner may 
 require or allow two or more affiliated insurers subject to 
 registration to file a consolidated registration statement. 

    Subd. 9.    Alternative registration.  The commissioner 
 may allow an insurer that is authorized to do business in this 
 state and that is part of an insurance holding company system to 
 register on behalf of any affiliated insurer that is required to 
 register under subdivision 1 and to file all information and 
 material required to be filed under this section. 

    Subd. 10.    Exemptions.  The provisions of this section 
 do not apply to any insurer, information, or transaction if and 
 to the extent that the commissioner by rule or order shall 
 exempt the same from the provisions of this section. 

    Subd. 11.    Disclaimer.  Any person may file with the 
 commissioner a disclaimer of affiliation with any authorized 
 insurer or the disclaimer may be filed by the insurer or any 
 member of an insurance holding company system.  The disclaimer 
 shall fully disclose all material relationships and bases for 
 affiliation between the person and the insurer as well as the 
 basis for disclaiming the affiliation.  After a disclaimer has 
 been filed, the insurer shall be relieved of any duty to 
 register or report under this section that may arise out of the 
 insurer's relationship with the person unless and until the 
 commissioner disallows the disclaimer.  The commissioner shall 
 disallow the disclaimer only after furnishing all parties in 
 interest with notice and opportunity to be heard and after 
 making specific findings of fact to support the disallowance. 

    Subd. 12.    Violations.  The failure to file a 
 registration statement or any summary of the registration 
 statement required by this section within the time specified for 
 the filing is a violation of this section. 

    HIST: 1991 c 325 art 14 s 6 

     60D.20 Standards and management of an insurer within a 
  holding company system. 

    Subdivision 1.    Transactions within a holding company 
 system.  (a) Transactions within a holding company system to 
 which an insurer subject to registration is a party are subject 
 to the following standards: 

    (1) the terms shall be fair and reasonable; 

    (2) charges or fees for services performed shall be 
 reasonable; 

    (3) expenses incurred and payment received shall be 
 allocated to the insurer in conformity with customary insurance 
 accounting practices consistently applied; 

    (4) the books, accounts, and records of each party to all 
 such transactions shall be so maintained as to clearly and 
 accurately disclose the nature and details of the transactions 
 including this accounting information as is necessary to support 
 the reasonableness of the charges or fees to the respective 
 parties; and 

    (5) the insurer's surplus as regards policyholders 
 following any dividends or distributions to shareholder 
 affiliates shall be reasonable in relation to the insurer's 
 outstanding liabilities and adequate to its financial needs. 

    (b) The following transactions involving a domestic insurer 
 and any person in its holding company system may not be entered 
 into unless the insurer has notified the commissioner in writing 
 of its intention to enter into the transaction at least 30 days 
 prior thereto, or a shorter period the commissioner permits, and 
 the commissioner has not disapproved it within this period. 

    (1) sales, purchases, exchanges, loans or extensions of 
 credit, guarantees, or investments provided the transactions are 
 equal to or exceed:  (i) with respect to nonlife insurers, the 
 lesser of three percent of the insurer's admitted assets, or 25 
 percent of surplus as regards policyholders; (ii) with respect 
 to life insurers, three percent of the insurer's admitted 
 assets; each as of the 31st day of December next preceding; 

    (2) loans or extensions of credit to any person who is not 
 an affiliate, where the insurer makes the loans or extensions of 
 credit with the agreement or understanding that the proceeds of 
 the transactions, in whole or in substantial part, are to be 
 used to make loans or extensions of credit to, to purchase 
 assets of, or to make investments in, any affiliate of the 
 insurer making such loans or extensions of credit provided the 
 transactions are equal to or exceed:  (i) with respect to 
 nonlife insurers, the lesser of three percent of the insurer's 
 admitted assets or 25 percent of surplus as regards 
 policyholders; (ii) with respect to life insurers, three percent 
 of the insurer's admitted assets; each as of the 31st day of 
 December next preceding; 

    (3) reinsurance agreements or modifications to those 
 agreements in which the reinsurance premium or a change in the 
 insurer's liabilities equals or exceeds five percent of the 
 insurer's surplus as regards policyholders, as of the 31st day 
 of December next preceding, including those agreements which may 
 require as consideration the transfer of assets from an insurer 
 to a nonaffiliate, if an agreement or understanding exists 
 between the insurer and nonaffiliate that any portion of such 
 assets will be transferred to one or more affiliates of the 
 insurer; 

    (4) all management agreements, service contracts and all 
 cost-sharing arrangements; and 

    (5) any material transactions, specified by regulation, 
 which the commissioner determines may adversely affect the 
 interests of the insurer's policyholders. 

    Nothing contained in this section authorizes or permits any 
 transactions that, in the case of an insurer not a member of the 
 same holding company system, would be otherwise contrary to law. 

    (c) A domestic insurer may not enter into transactions 
 which are part of a plan or series of like transactions with 
 persons within the holding company system if the purpose of 
 those separate transactions is to avoid the statutory threshold 
 amount and thus avoid the review that would occur otherwise.  If 
 the commissioner determines that the separate transactions were 
 entered into over any 12-month period for the purpose, the 
 commissioner may exercise the authority under section 60D.25. 

    (d) The commissioner, in reviewing transactions pursuant to 
 paragraph (b), shall consider whether the transactions comply 
 with the standards set forth in paragraph (a), and whether they 
 may adversely affect the interests of policyholders. 

    (e) The commissioner shall be notified within 30 days of 
 any investment of the domestic insurer in any one corporation if 
 the total investment in the corporation by the insurance holding 
 company system exceeds ten percent of the corporation's voting 
 securities. 

    Subd. 2.    Dividends and other distributions.  (a) 
 Subject to the limitations and requirements of this subdivision, 
 the board of directors of any domestic insurer within an 
 insurance holding company system may authorize and cause the 
 insurer to declare and pay any dividend or distribution to its 
 shareholders as the directors deem prudent from the earned 
 surplus of the insurer.  An insurer's earned surplus, also known 
 as unassigned funds, shall be determined in accordance with the 
 accounting procedures and practices governing preparation of its 
 annual statement.  Dividends which are paid from sources other 
 than an insurer's earned surplus as of the end of the 
 immediately preceding quarter for which the insurer has filed a 
 quarterly or annual statement as appropriate, or are 
 extraordinary dividends or distributions may be paid only as 
 provided in paragraphs (d), (e), and (f). 

    (b) The insurer shall notify the commissioner within five 
 business days following declaration of a dividend declared 
 pursuant to paragraph (a) and at least ten days prior to its 
 payment.  The commissioner shall promptly consider the 
 notification filed pursuant to this paragraph, taking into 
 consideration the factors described in subdivision 4. 

    (c) The commissioner shall review at least annually the 
 dividends paid by an insurer pursuant to paragraph (a) for the 
 purpose of determining if the dividends are reasonable based 
 upon (1) the adequacy of the level of surplus as regards 
 policyholders remaining after the dividend payments, and (2) the 
 quality of the insurer's earnings and extent to which the 
 reported earnings include extraordinary items, such as surplus 
 relief reinsurance transactions and reserve destrengthening. 

    (d) No domestic insurer shall pay any extraordinary 
 dividend or make any other extraordinary distribution to its 
 shareholders until:  (1) 30 days after the commissioner has 
 received notice of the declaration of it and has not within the 
 period disapproved the payment; or (2) the commissioner has 
 approved the payment within the 30-day period. 

    (e) For purposes of this section, an extraordinary dividend 
 or distribution includes any dividend or distribution of cash or 
 other property, whose fair market value together with that of 
 other dividends or distributions made within the preceding 12 
 months exceeds the greater of (1) ten percent of the insurer's 
 surplus as regards policyholders on December 31 of the preceding 
 year; or (2) the net gain from operations of the insurer, if the 
 insurer is a life insurer, or the net income, if the insurer is 
 not a life insurer, not including realized capital gains, for 
 the 12-month period ending on December 31 of the preceding year, 
 but does not include pro rata distributions of any class of the 
 insurer's own securities.  

    (f) Notwithstanding any other provision of law, an insurer 
 may declare an extraordinary dividend or distribution that is 
 conditional upon the commissioner's approval, and the 
 declaration shall confer no rights upon shareholders until:  (1) 
 the commissioner has approved the payment of such a dividend or 
 distribution; or (2) the commissioner has not disapproved the 
 payment within the 30-day period referred to above. 

    Subd. 3.    Management of domestic insurers subject to 
 registration.  (a) Notwithstanding the control of a domestic 
 insurer by any person, the officers and directors of the insurer 
 shall not thereby be relieved of any obligation or liability to 
 which they would otherwise be subject by law, and the insurer 
 shall be managed so as to assure its separate operating identity 
 consistent with this chapter. 

    (b) Nothing in this chapter precludes a domestic insurer 
 from having or sharing a common management use of personnel, 
 property, or services with one or more other persons under 
 arrangements meeting the standards of subdivision 1, paragraph 
 (a), clause (1). 

    (c) Not less than one-third of the directors of a publicly 
 traded domestic insurer, and not less than one-third of the 
 members of each committee of the board of directors of any 
 publicly traded domestic insurer shall be persons who are not 
 officers or employees of the insurer or of any entity 
 controlling, controlled by, or under common control with the 
 insurer and who are not beneficial owners of a controlling 
 interest in the voting stock of the insurer or any such entity.  
 At least one such person must be included in any quorum for the 
 transaction of business at any meeting of the board of directors 
 or any committee of the board. 

    (d) The board of directors of a publicly traded domestic 
 insurer shall establish an audit committee having a majority of 
 directors who are not officers or employees of the insurer or of 
 any entity controlling, controlled by, or under common control 
 with the insurer and who are not beneficial owners of a 
 controlling interest in the voting stock of the insurer or any 
 such entity.  The committee shall have responsibility for 
 selecting independent certified public accountants and reviewing 
 the scope and results of the independent audit and any internal 
 audit.  

    (e) Paragraphs (c) and (d) do not apply to a domestic 
 insurer if the person controlling the insurer is an insurer, or 
 a general business corporation the principal business of which 
 is insurance, having a board of directors and committees of the 
 board that meet the requirements of paragraphs (c) and (d). 

    Subd. 4.    Adequacy of surplus.  For purposes of this 
 chapter, in determining whether an insurer's surplus as regards 
 policyholders is reasonable in relation to the insurer's 
 outstanding liabilities and adequate to its financial needs, the 
 following factors, among others, must be considered: 

    (1) the size of the insurer as measured by its assets, 
 capital and surplus, reserves, premium writings, insurance in 
 force and other appropriate criteria; 

    (2) the extent to which the insurer's business is 
 diversified among the several lines of insurance; 

    (3) the number and size of risks insured in each line of 
 business; 

    (4) the extent of the geographical dispersion of the 
 insurer's insured risks; 

    (5) the nature and extent of the insurer's reinsurance 
 program; 

    (6) the quality, diversification and liquidity of the 
 insurer's investment portfolio; 

    (7) the recent past and projected future trend in the size 
 of the insurer's investment portfolio; 

    (8) the surplus as regards policyholders maintained by 
 other comparable insurers; 

    (9) the adequacy of the insurer's reserves; 

    (10) the quality and liquidity of investments in affiliates.
 The commissioner may treat any such investment as a disallowed 
 asset for purposes of determining the adequacy of surplus as 
 regards policyholders whenever in the commissioner's judgment 
 the investment so warrants; and 

    (11) the quality of the insurer's earnings and the extent 
 to which the reported earnings include extraordinary items, such 
 as surplus relief reinsurance transactions and reserve 
 destrengthening. 

    HIST: 1991 c 325 art 14 s 7; 1992 c 464 art 1 s 8; 1993 c 299 
 s 9,10; 1994 c 425 s 8; 1999 c 177 s 28 

     60D.21 Examination. 

    Subdivision 1.    Power of commissioner.  Subject to the 
 limitation contained in this section and in addition to the 
 powers that the commissioner has under chapter 60A relating to 
 the examination of insurers, the commissioner shall also have 
 the power to order any insurer registered under section 60D.19 
 to produce records, books, or other information papers in the 
 possession of the insurer or its affiliates as are reasonably 
 necessary to ascertain the financial condition of the insurer or 
 to determine compliance with this chapter.  In the event the 
 insurer fails to comply with the order, the commissioner shall 
 have the power to examine the affiliates to obtain the 
 information. 

    Subd. 2.    Use of consultants.  The commissioner may 
 retain at the registered insurer's expense the attorneys, 
 actuaries, accountants, and other experts not otherwise a part 
 of the commissioner's staff that are reasonably necessary to 
 assist in the conduct of the examination under subdivision 1.  
 Any person so retained shall be under the direction and control 
 of the commissioner and shall act in a purely advisory capacity. 

    Subd. 3.    Expenses.  Each registered insurer producing 
 for examination records, books, and papers pursuant to 
 subdivision 1 is liable for and shall pay the expense of the 
 examination in accordance with section 60A.03. 

    HIST: 1991 c 325 art 14 s 8 

     60D.22 Confidential treatment. 

    All information, documents, and copies of them obtained by 
 or disclosed to the commissioner or any other person in the 
 course of an examination or investigation made pursuant to 
 section 60D.20 and all information reported pursuant to sections 
 60D.18 and 60D.19, shall be given confidential treatment and 
 shall not be subject to subpoena and shall not be made public by 
 the commissioner, the National Association of Insurance 
 Commissioners, or any other person, except to insurance 
 departments of other states, without the prior written consent 
 of the insurer to which it pertains unless the commissioner, 
 after giving the insurer and its affiliates who would be 
 affected, notice and opportunity to be heard, determines that 
 the interest of policyholders or the public will be served by 
 the publication, in which event the commissioner may publish all 
 or any part in the manner the commissioner considers appropriate.

    HIST: 1991 c 325 art 14 s 9 

     60D.23 Rules. 

    The commissioner may adopt the rules and orders that are 
 necessary to carry out the provisions of this chapter. 

    HIST: 1991 c 325 art 14 s 10 

     60D.24 Injunctions, prohibitions against voting 
  securities, sequestration of voting securities. 

    Subdivision 1.    Injunctions.  Whenever it appears to 
 the commissioner that any insurer or any director, officer, 
 employee, or agent of the insurer has committed or is about to 
 commit a violation of this chapter or of any rule or order 
 issued by the commissioner, the commissioner may apply to the 
 district court for the county in which the principal office of 
 the insurer is located or if the insurer has no such office in 
 this state then to the district court for Ramsey county for an 
 order enjoining the insurer or the director, officer, employee, 
 or agent of the insurer from violating or continuing to violate 
 this chapter or any rule or order, and for other equitable 
 relief as the nature of the case and the interest of the 
 insurer's policyholders or the public requires. 

    Subd. 2.    Voting of securities; when prohibited.  No 
 security that is the subject of any agreement or arrangement 
 regarding acquisition, or that is acquired or to be acquired, in 
 contravention of the provisions of this chapter or of any rule 
 or order issued by the commissioner may be voted at any 
 shareholder's meeting, or may be counted for quorum purposes, 
 and any action of shareholders requiring the affirmative vote of 
 a percentage of shares may be taken as though the securities 
 were not issued and outstanding.  No action taken at the meeting 
 shall be invalidated by the voting of the securities, unless the 
 action would materially affect control of the insurer or unless 
 the courts of this state have so ordered.  If an insurer or the 
 commissioner has reason to believe that any security of the 
 insurer has been or is about to be acquired in contravention of 
 the provisions of this chapter or of any rule or order issued by 
 the commissioner, the insurer or the commissioner may apply to 
 the district court for the county in which the insurer has its 
 principal place of business to enjoin any offer, request, 
 invitation, agreement, or acquisition made in contravention of 
 section 60D.16 or any rule or order issued by the commissioner 
 to enjoin the voting of any security so acquired, to void any 
 vote of the security already cast at any meeting of shareholders 
 and for other equitable relief as the nature of the case and the 
 interest of the insurer's policyholders or the public requires. 

    Subd. 3.    Sequestration of voting securities.  In any 
 case where a person has acquired or is proposing to acquire any 
 voting securities in violation of this chapter or any rule or 
 order issued by the commissioner, the district court for Ramsey 
 county or the district court for the county in which the insurer 
 has its principal place of business may, on such notice as the 
 court considers appropriate, upon the application of the insurer 
 or the commissioner seize or sequester any voting securities of 
 the insurer owned directly or indirectly by the person, and 
 issue any order with respect thereto as may be appropriate to 
 effectuate the provisions of this chapter. 

    Notwithstanding any other provisions of law, for the 
 purposes of this chapter the sites of the ownership of the 
 securities of domestic insurers shall be considered to be in 
 this state. 

    HIST: 1991 c 325 art 14 s 11 

     60D.25 Receivership. 

    Whenever it appears to the commissioner that any person has 
 committed a violation of this chapter that so impairs the 
 financial condition of a domestic insurer as to threaten 
 insolvency or make the further transaction of business by it 
 hazardous to its policyholders or the public, then the 
 commissioner may proceed as provided in chapter 60B to take 
 possessions of the property of the domestic insurer and to 
 conduct the business of that insurer. 

    HIST: 1991 c 325 art 14 s 12 

     60D.26 Recovery. 

    (a) If an order for liquidation or rehabilitation of a 
 domestic insurer has been entered, the receiver appointed under 
 the order shall have a right to recover on behalf of the 
 insurer, (1) from any parent corporation or holding company or 
 person or affiliate who otherwise controlled the insurer, the 
 amount of distributions, other than distributions of shares of 
 the same class of stock, paid by the insurer on its capital 
 stock, or (2) any payment in the form of a bonus, termination 
 settlement or extraordinary lump sum salary adjustment made by 
 the insurer or its subsidiary(s) to a director, officer, or 
 employee, where the distribution or payment pursuant to clause 
 (1) or (2) is made at any time during the one year preceding the 
 petition for liquidation, conservation, or rehabilitation, as 
 the case may be, subject to the limitations of paragraphs (b), 
 (c), and (d). 

    (b) No such distribution shall be recoverable if the parent 
 or affiliate shows that when paid the distribution was lawful 
 and reasonable, and that the insurer did not know and could not 
 reasonably have known that the distribution might adversely 
 affect the ability of the insurer to fulfill its contractual 
 obligations. 

    (c) Any person who was a parent corporation or holding 
 company or a person who otherwise controlled the insurer or 
 affiliate at the time such distributions were paid shall be 
 liable up to the amount of distributions or payments under 
 paragraph (a), the person received.  Any person who otherwise 
 controlled the insurer at the time the distributions were 
 declared is liable up to the amount of distributions the person 
 would have received if they had been paid immediately.  If two 
 or more persons are liable with respect to the same 
 distributions, they are jointly and severally liable. 

    (d) The maximum amount recoverable under this subsection 
 shall be the amount needed in excess of all other available 
 assets of the impaired or insolvent insurer to pay the 
 contractual obligations of the impaired or insolvent insurer and 
 to reimburse any guaranty funds. 

    (e) To the extent that any person liable under paragraph 
 (c) is insolvent or otherwise fails to pay claims due from it 
 pursuant to this paragraph, its parent corporation or holding 
 company or person who otherwise controlled it at the time the 
 distribution was paid, is jointly and severally liable for any 
 resulting deficiency in the amount recovered from the parent 
 corporation or holding company or person who otherwise 
 controlled it. 

    HIST: 1991 c 325 art 14 s 13 

     60D.27 Revocation, suspension, or nonrenewal of 
  insurer's license. 

    Whenever it appears to the commissioner that any person has 
 committed a violation of this chapter that makes the continued 
 operation of an insurer contrary to the interests of 
 policyholders or the public, the commissioner may, after giving 
 notice and an opportunity to be heard, determine to suspend, 
 revoke, or refuse to renew the insurer's license or authority to 
 do business in this state for the period the commissioner finds 
 is required for the protection of policyholders or the public.  
 The determination must be accompanied by specific findings of 
 fact and conclusions of law. 

    HIST: 1991 c 325 art 14 s 14 

     60D.28 Judicial review, mandamus. 

    (a) Any person aggrieved by any act, determination, rule or 
 order, or any other action of the commissioner pursuant to this 
 chapter may appeal therefrom to the district court for Ramsey 
 county.  The court shall conduct its review without a jury and 
 by trial de novo, except that if all parties, including the 
 commissioner, so stipulate, the review shall be confined to the 
 record.  Portions of the record may be introduced by stipulation 
 into evidence in a trial de novo as to those parties so 
 stipulated. 

    (b) The filing of an appeal pursuant to this section shall 
 stay the application of the rule, order, or other action of the 
 commissioner to the appealing party unless the court, after 
 giving the party notice and an opportunity to be heard, 
 determines that the stay would be detrimental to the interest of 
 policyholders or the public. 

    (c) Any person aggrieved by any failure of the commissioner 
 to act or make a determination required by this chapter may 
 petition the district court for Ramsey county for a writ in the 
 nature of a mandamus or a peremptory mandamus directing the 
 commissioner to act or make this determination immediately. 

    HIST: 1991 c 325 art 14 s 15 

     60D.29 Conflict with other laws. 

    All laws and parts of laws of this state inconsistent with 
 this chapter are superseded with respect to matters covered by 
 this chapter. 

    HIST: 1991 c 325 art 14 s 16