806 KAR 24:020. Change of control through capital stock acquisition.
RELATES TO: KRS 304.24-410
STATUTORY AUTHORITY: KRS 304.2-110
NECESSITY, FUNCTION, AND CONFORMITY: KRS 304.2-110 provides that the Executive Director of Insurance may make reasonable rules and administrative regulations necessary for or as an aid to the effectuation of any provision of the Kentucky Insurance Code. This administrative regulation forbids the change of control through capital stock acquisition of a domestic insurer, except by merger, consolidation, or affiliation as covered by the insurance code.
Section 1. The acquisition by or for the benefit of any person of fifteen (15) percent for more of the outstanding voting capital stock of a domestic insurer shall be presumed to be for the purposes, of changing the control of such insurer, and shall subject such person to the requirement of first making written application to the executive director for approval thereof.
Section 2. Whenever there has been an acquisition of stock, by or for the benefit of any person of less than fifteen (15) percent of the outstanding voting capital stock of a domestic insurer, and current circumstances indicate to the executive director that there is a genuine question of whether the stock acquired was controlling stock, then the executive director may enter an order forbidding any further steps to implement the taking of control until such question is determined. If, after a hearing, the executive director determines that the acquisition does constitute control or potential control, he may then proceed under KRS 304.24-410.
Section 3. The presumption referred to in Section 1 of this administrative regulation and the required prior approval pursuant thereto, shall not apply in the case of merger or consolidation or affiliation as provided for by the insurance code.
Section 4. The application contemplated by Section 1 of this administrative regulation shall be filed personally with the executive director, and if requested by the applicant, shall be considered confidential and not open to public inspection, and shall not, except in the event of acute emergency or attack as defined in KRS 304.25-020, or where otherwise it is a physical impossibility for at least thirty (30) days, be filed with or received by any deputy, clerk, or employee of the Office of Insurance. Provided, however, the executive director may, in his discretion, determine that it is in the public interest to have a public hearing on the application, and upon such determination he may disclose the application and follow the necessary procedures of notice for a public hearing. (I-24.03; 1 Ky.R. 1085; eff. 7-2-75; TAm eff. 8-9-2007.)