CHAPTER 3. ACQUISITION OF CERTAIN MINORITY INTERESTS IN SUBSIDIARY DOMESTIC STOCK INSURANCE COMPANIES
IC 27-3-3
Chapter 3. Acquisition of Certain Minority Interests in Subsidiary
Domestic Stock Insurance Companies
IC 27-3-3-1
Definitions
Sec. 1. As used in this chapter:
(a) "Commissioner" means the insurance commissioner of this
state.
(b) "Domestic insurer" means a stock insurance company
organized under the laws of this state.
(c) "Parent corporation" means a corporation organized for any
purpose under the laws of this state or any other jurisdiction
that owns, directly or indirectly, at least ninety percent (90%)
of the issued and outstanding voting stock of a domestic insurer.
(d) "Subsidiary insurer" means a domestic insurer, at least
ninety percent (90%) of the issued and outstanding voting stock
of which is owned by a parent corporation.
(e) "Voting stock" means shares issued by a domestic insurer,
the record holders of which are entitled to vote at each election
of directors of the domestic insurer, and securities convertible
into or evidencing a right to acquire the shares.
(Formerly: Acts 1973, P.L.278, SEC.1.) As amended by
P.L.245-1989, SEC.2.
IC 27-3-3-2
Manner of acquisition
Sec. 2. Any parent corporation may acquire all of the issued and
outstanding voting stock of its subsidiary insurer not owned by the
parent corporation in exchange for shares or other securities of the
parent corporation, or cash, other consideration, or any combination
of the foregoing, in the manner provided in this section. The board
of directors of the parent corporation, by resolution approved by a
majority of the whole board, shall adopt a plan of acquisition setting
forth:
(1) the name of the subsidiary insurer;
(2) the designation and a description of the voting rights of each
class, and any series thereof, of voting stock of the subsidiary
insurer;
(3) the total number of issued and outstanding shares of each
class, and any series thereof, of voting stock of the subsidiary
insurer, the number of such shares owned by the parent
corporation and, if either of the foregoing is subject to change
prior to the proposed acquisition, the manner in which any
change may occur;
(4) the terms and conditions of the acquisition, including the
consideration to be paid and the proposed effective date of
acquisition, and a statement clearly describing the rights of
shareholders dissenting from the plan of acquisition;
(5) if the parent corporation is not authorized to do business in
this state, its consent to the enforcement against it in this state
of the rights of shareholders pursuant to the plan of acquisition
or the rights of shareholders dissenting from that plan, and a
designation of the commissioner as the agent upon whom
process may be served against the parent corporation in any
action or proceeding to enforce those rights; and
(6) such other provisions with respect to the acquisition as the
board of directors of the parent corporation deems necessary or
appropriate.
(b) Upon adoption of a plan of acquisition, the parent corporation
shall submit that plan to the commissioner in duplicate, certified by
the secretary or an assistant secretary of the parent corporation as
having been adopted in accordance with the provisions of this
chapter. Within thirty (30) days from the date the plan is submitted
to the commissioner, he shall endorse his approval or disapproval
and the date thereof on both copies of the plan, file one (1) copy of
the plan in his offices, and deliver the other copy to the parent
corporation. No plan of acquisition shall take effect unless the
approval of the commissioner has been obtained. The commissioner
shall approve the plan of acquisition if he is satisfied that the plan
complies with this chapter and that the terms and conditions of the
plan of acquisition are fair and reasonable. If the commissioner
disapproves the plan, he shall advise the parent corporation in
writing of the reasons for his disapproval. The commissioner's
disapproval of a plan of acquisition shall be subject to judicial
review upon the petition of the parent corporation in accordance, so
far as practical, with IC 4-21.5-5.
(c) If the commissioner approves the plan of acquisition, and if the
plan has not been abandoned, the parent corporation shall deliver a
copy of the plan or a summary thereof approved by the commissioner
to each person who, as of the date of delivery, is a holder of record
of voting stock to be acquired pursuant to the plan. Delivery shall be
made either in person or by depositing a copy of the plan or an
approved summary thereof in the United States mails, postage
prepaid, addressed to the shareholder at his address of record as
furnished by the subsidiary insurer or its transfer agent. The parent
corporation shall thereafter file with the commissioner an affidavit
of its secretary or assistant secretary setting forth that the delivery
was made and the date of delivery.
(d) Notwithstanding approval by the commissioner of the plan of
acquisition or delivery of the plan or of an approved summary
thereof to shareholders, the plan of acquisition may be abandoned at
any time prior to the proposed effective date of acquisition pursuant
to a provision for abandonment, if any, contained in the plan.
(e) Upon compliance with the requirements of this section and if
the plan of acquisition has not been abandoned, ownership of the
voting stock to be acquired pursuant to the plan shall automatically
vest in the parent corporation on the date of acquisition proposed in
the plan, without any physical transfer or deposit of certificates
representing that voting stock, and the parent corporation shall be
entitled to have new certificates therefor registered in its name.
Shareholders whose voting stock is so acquired shall cease to be
shareholders and shall have only the right to receive the
consideration to be paid in exchange for their voting stock pursuant
to the plan of acquisition.
(Formerly: Acts 1973, P.L.278, SEC.1.) As amended by P.L.7-1987,
SEC.144.
IC 27-3-3-3
Dissent and demand by subsidiary stockholder; withdrawal; notice
and offer; acceptance; appraisal; procedure
Sec. 3. Within thirty (30) days after delivery of the plan of
acquisition or an approved summary thereof to shareholders as
hereinabove provided, any shareholder of the subsidiary insurer may
notify the subsidiary insurer in writing of his dissent from the plan
and of his demand for payment of fair value of his voting stock, and,
if the acquisition proposed in the plan is effected, the subsidiary
insurer shall pay to each dissenting shareholder, upon surrender of
the certificate or certificates representing the affected voting stock,
the fair value thereof as of the day prior to the date on which the plan
of acquisition was adopted by the board of directors of the parent
corporation, excluding any appreciation or depreciation in
anticipation of, or resulting from, that corporate action. Dissent and
demand under this section shall be accompanied by the certificate or
certificates representing the dissenting shareholder's voting stock for
notation thereon that dissent and demand have been made, unless a
court of competent jurisdiction, for good and sufficient cause shown,
shall otherwise direct. Dissent and demand shall only be made jointly
by holders of voting stock jointly held. Any shareholder failing to
make the dissent and demand accompanied by certificates
representing his voting stock within the thirty (30) day period shall
be bound by the terms and conditions of the plan of acquisition. Any
shareholder making dissent and demand accompanied by certificates
representing his voting stock shall thereafter have no rights with
respect to that voting stock except the right to receive payment
therefor under this section, and a transferee of voting stock shall
acquire by the transfer no rights other than those which the original
dissenting shareholder had after making dissent and demand.
No dissent and demand may be withdrawn unless the president or
a vice-president of the subsidiary insurer shall consent thereto in
writing. If, however, dissent and demand is withdrawn upon such
consent, or if the plan of acquisition is abandoned, or if a dissenting
shareholder fails to submit for notation or surrender for payment the
certificate or certificates representing his voting stock at the time and
in the manner required by this section, or if a dissenting shareholder
does not file a petition for a determination of fair value of his voting
stock within the time and in the manner provided in this section and
the subsidiary insurer does not file a petition for such determination,
or if a court of competent jurisdiction determines that a dissenting
shareholder is not entitled to the relief provided by this section, then
the right of the dissenting shareholder to be paid the fair value of his
voting stock shall cease and his status and rights shall be the same as
a shareholder failing to make dissent and demand, without prejudice
to any corporate proceedings which may have been taken during the
interim.
Within sixty (60) days after the acquisition proposed in the plan
is effected, the subsidiary insurer shall give written notice thereof to
each shareholder who has made dissent and demand as in this section
provided, and shall make a written offer to each such dissenting
shareholder to pay for his voting stock a specified price deemed by
the subsidiary insurer to be the fair value thereof. This notice and
offer shall be made when deposited in the United States mails,
postage prepaid, addressed to the dissenting shareholder at his
address of record. If the offer is accepted in writing by the dissenting
shareholder, the subsidiary insurer shall pay the specified price to the
dissenting shareholder upon surrender of the certificate or certificates
representing his voting stock. Upon such payment the dissenting
shareholder shall cease to have any interest in such voting stock and
such voting stock shall be retired by the subsidiary insurer pursuant
to IC 1971, 27-1-8-12.
If within thirty (30) days after the date of the mailing of the
written offer the subsidiary insurer and a dissenting shareholder do
not agree in writing upon the fair value, the subsidiary insurer or the
dissenting shareholder may, within ninety (90) days after the date of
the mailing of the written offer, petition the circuit or superior court
of the county in which the principal office of the subsidiary insurer
is located to appraise the fair value of the voting stock as of the day
prior to the date on which the plan of acquisition was adopted by the
board of directors of the parent corporation, excluding any
appreciation or depreciation in anticipation of, or resulting from, that
corporate action. If more than one (1) petition is filed, the petitions
may be consolidated or joint hearings may be held thereon. The
practice, procedure and judgment in the circuit or superior court shall
be the same, so far as practical, as that under the eminent domain
laws in this state. The judgment of the circuit or superior court shall
be final. A judgment shall be payable only upon and concurrently
with the surrender by such dissenting shareholder to the subsidiary
insurer of the certificate or certificates representing the voting stock.
Upon payment of the judgment, the dissenting shareholder shall
cease to have any interest in the voting stock and such voting stock
shall be retired by the subsidiary insurer pursuant to IC 1971,
27-1-8-12.
This section shall provide the exclusive method for dissenting
from a plan of acquisition effected pursuant to this chapter and
demanding payment of fair value of the voting stock acquired or to
be acquired under such a plan.
(Formerly: Acts 1973, P.L.278, SEC.1.)
IC 27-3-3-4
Parent and subsidiary as separate corporations
Sec. 4. Notwithstanding a plan of acquisition effected pursuant to
this chapter, the parent corporation and its subsidiary insurer shall in
all respects stand before the law as separate and distinct
corporations, with neither of the corporations having any liability to
the creditors, policyholders, if any, or shareholders of the other,
notwithstanding any actions or omissions of the officers, directors,
or shareholders of either or both of the corporations.
(Formerly: Acts 1973, P.L.278, SEC.1.)
IC 27-3-3-5
Application of chapter
Sec. 5. The method authorized by this chapter for acquiring voting
stock of a subsidiary insurer is not exclusive, but is in addition to any
other lawful method for the acquisition of such voting stock.
(Formerly: Acts 1973, P.L.278, SEC.1.)