§236.6.  Limitations on acquisition of beneficial ownership

A.  Except as otherwise specifically provided in the plan of reorganization, prior to and for a period of five years following the effective date of the reorganization, no person or persons acting in concert, other than the reorganized company or any employee benefit plans or trusts sponsored by the reorganized company or its corporate affiliates, shall directly or indirectly offer to acquire or acquire in any manner the beneficial ownership of five percent or more of any class of a voting security of the reorganized company or any person that owns or controls a majority or all of the voting securities of the reorganized company without the prior approval by the commissioner of an application for acquisition filed by that person with the commissioner.

B.  The commissioner shall not approve an application for acquisition unless he finds each of the following:

(1)  The acquisition would not frustrate the plan of reorganization as approved by the qualified voters and the commissioner.

(2)  The board of directors of the reorganized company or its parent corporation, as applicable, has approved the acquisition, or extraordinary circumstances not contemplated in the plan of reorganization have arisen that would warrant their approval of the acquisition.

(3)  The acquisition would be in the best interest of the reorganized company and policyholders of the reorganized insurer or insurers.  In determining whether an acquisition would be in the best interest of the reorganized company and policyholders of the reorganized insurer or insurers, the commissioner may consider such factors as he deems relevant, which may but are not required to include any or all of the following: (a) the possible effects on shareholders, employers, suppliers, creditors, and customers of the reorganized company and its affiliates; (b) possible effects on the economy of the communities in which the reorganized company is located, and on that of this state; and (c) company and policyholders of the reorganized insurer or insurers, including but not limited to the possibility that those interests may be best served by the continued independence of the reorganized company.

C.  No security that is the subject of any agreement or arrangement regarding acquisition or that is acquired or to be acquired in contravention of this Section or of an order of the commissioner may be voted at any shareholders' meeting, 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; however, no action taken at a meeting shall be invalidated by the voting of those securities unless the action would materially affect control of the reorganized insurer or a person that owns or controls a majority or all of the voting securities of the reorganized insurer or unless the courts of this state have so ordered.

Acts 2008, No. 307, §1, eff. June 17, 2008.