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- Alaska Statutes.
- Title 21. Insurance
- Chapter 22. Insurance Holding Companies
- Section 65. Acquisitions Involving Change of Control.
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AS 21.22.065. Acquisitions Involving Change of Control.
- (a) Unless exempted in (j) of this section, 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) If an acquisition violates the standards established in (d) and (f) of this section, the director may enter an order
requiring an involved insurer to cease doing business in this state with respect to the line or lines of insurance
involved in the violation or denying the application of an acquired or acquiring insurer for a license to do business
in this state. Within 30 days of the issuance of the order, the involved insurer may submit a plan to remedy the
anticompetitive effect of the acquisition within a reasonable time. Based upon a plan or other information submitted,
the director shall specify the conditions, if any, under a 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. The order is
stayed by the insurer's submission of a plan and shall be rescinded if the acquisition is not consummated.
- (c) An acquisition that meets the requirements under (a) of this section is subject to an order under (b) of this section
unless the acquiring person files a preacquisition notification and the waiting period has expired. The person to be
acquired may file a preacquisition notification. A preacquisition notification by a person to be acquired may not be
filed in place of a preacquisition filing by an acquiring person. The preacquisition notification
- (1) must be in a form and contain the information prescribed in regulations adopted by the director relating to insurance
markets that, under (j)(5) of this section, cause the acquisition not to be exempt from the provisions of this section;
the director may require additional material and information the director considers necessary to determine whether the
proposed acquisition, if consummated, would violate the competitive standards of this section;
- (2) may include an opinion of an economist regarding the competitive effect of the acquisition in this state accompanied
by a summary of the education and experience indicating the economist's ability to render an informed opinion; and
- (3) must be followed by a waiting period beginning on the date of receipt by the director of a preacquisition notification
and ending on the earlier of the 30th day after the date of receipt or termination of the waiting period by the
director unless, before the end of the waiting period, the director requires the submission of additional information
relevant to the proposed acquisition, in which event the waiting period shall end on the 30th day after receipt of the
additional information by the director or termination of the waiting period by the director, whichever is earlier.
- (d) The director may enter an order under (b) of this section regarding an acquisition if
- (1) the insurer fails to file adequate information in compliance with (c) of this section;
- (2) there is substantial evidence that the acquisition may substantially lessen competition, create a monopoly in a line
of insurance in this state or significantly increase an insurer's market concentration;
- (3) there is substantial evidence when the aggregate market share of any grouping of the largest insurers in the market,
from the two largest to the eighth largest, has increased by seven percent or more of the market over a period of time
extending from any base year five to 10 years before the acquisition up to the time of the acquisition;
- (4) after considering an acquisition covered under (a) of this section involving two or more insurers competing in the
same market there is evidence of a violation of the competitive standards contained in the following tables:
- (A) if the market is highly concentrated, 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;
(B) if the market is not highly concentrated, 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.
- (e) A percentage not shown in the tables contained in (d) of this section may be interpolated proportionately to the
percentage that is shown. The insurer with the largest share of the market shall be considered Insurer A. If more than
two insurers are involved, a market share that exceeds the total of the two columns in the table by the insurers
involved is prima facie evidence of a violation of the competitive standards contained in (d) of this section.
- (f) Even though an acquisition does not violate the competitive standard under (d) of this section, the director may
establish the requisite anticompetitive effect based upon other substantial evidence. Even though an acquisition does
violate the competitive standard under (d) of this section, a party may establish the absence of the requisite
anticompetitive effect based upon other substantial evidence. Relevant factors in making a determination under (d) of
this section include market shares, volatility of ranking of market leaders, number of competitors, concentration,
trend of concentration in the industry, and ease of entry into and exit out of the market. The burden of showing
substantial evidence of a violation of the competitive standards rests with the director.
- (g) An order may not be entered under (b) of this section if
- (1) the acquisition will yield substantial economy of scale or economy in resource utilization that cannot be achieved in
another way and the public benefits that would arise from the economy exceed the public benefits that would arise from
not lessening competition; or
- (2) the acquisition will substantially increase the availability of insurance and the public benefits of the increase
exceed the public benefits that would arise from not lessening competition.
- (h) A person who violates a cease and desist order of the director under (b) of this section may, after hearing and on
order of the director, be subject to the suspension or revocation of a license, a civil penalty not to exceed $10,000
for each day of violation, or both.
- (i) An insurer or other person who fails to make a preacquisition filing required by (c) of this section and who also
fails to demonstrate a good faith effort to comply with filing requirements shall be subject to a fine of not more than
- (j) This section does not apply to
- (1) an acquisition subject to approval or disapproval by the director under AS 21.22.010
- (2) a purchase of securities solely for investment purposes if the securities are not used by voting or otherwise to cause
or attempt to cause the substantial lessening of competition in an insurance market in this state; if a purchase of
securities for investment purposes results in a presumption of control under AS 21.22.200
(2), it is not solely for investment purposes unless the insurance supervisory official of the insurer's state of
domicile accepts a disclaimer of control or affirmatively finds that control does not exist and the disclaimer action
or affirmative finding is communicated by the domiciliary insurance supervisory official to the director;
- (3) the acquisition of a person by another person resulting in a change of control of an insurer when both persons are
neither directly nor through affiliates primarily engaged in the business of insurance if preacquisition notification
is filed with the director under (c) of this section 30 days before the proposed effective date of the acquisition;
however, the preacquisition notification is not required for exclusion if the acquisition would otherwise be excluded
under this subsection;
- (4) the acquisition of an already affiliated person;
- (5) an acquisition if, as an immediate result of the acquisition,
- (A) the combined market share of the involved insurers would not exceed five percent of a market;
- (B) there would not be an increase in a market share of the larger writer; or
- (C) the combined market share of the involved insurers would not exceed 12 percent of a market and the market share of the
larger writer would not increase by more than two percent of a market;
- (6) an acquisition for which a preacquisition notification would be required under this section due solely to the
resulting effect on the ocean marine insurance line of business; or
- (7) an acquisition of an insurer whose domiciliary supervisory insurance official affirmatively finds that the insurer is
in a failing condition, there are no feasible alternatives to improving this 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 these findings are communicated by the domiciliary supervisory insurance official to this
- (k) AS 21.22.150
, 21.22.160, and 21.22.180 do not apply to acquisitions covered under this
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