40-2a09. Stock in any insurance company, health maintenance organization, incorporated insurance agency or holding corporation.
40-2a09
40-2a09. Stock in any insurance company, health maintenance organization,incorporated insurance agencyor holding corporation.Any insurance company other than life heretofore or hereafter organizedunder any law of this state may invest with the direction or approval ofa majority of its board of directors or authorized committee thereof,any of its funds, or any part thereof in:
(a) Stock in any insurance company or health maintenance organization,notwithstanding subsection (e) of K.S.A.40-2a08, and amendments thereto. Before more than 5% ofthe outstanding shares of stock of any insurance company or healthmaintenance organization is acquired, ora tender offer made therefor, prior written approval of the commissionerof insurance must be secured;
(b) stock in an incorporated insurance agency: (1) If5% or less of the outstanding shares of stock of such agency isacquired, the provisions of K.S.A. 40-2a08, and amendments thereto, shall apply; (2)if more than 5% of the outstanding shares of suchincorporated agency is acquired, or a tender offer is made therefor, theprior approval of the commissioner of insurance shall be required andthe provisions of subsection (d) of K.S.A. 40-2a08, and amendments thereto,shall apply. In valuing the stock of the agency, the assets of the agencyshall be valued as if held directly by an insurance company; and(3) if majority interest in an incorporated insurance agency resultsfrom the organization of an agency by the insurance company to whichthis act applies, such investments shall be subject to the provisions ofK.S.A. 40-2a16, and amendments thereto, until it has produced earnings forthree out of five consecutive years. Such stock shall not be eligible for deposit withthe commissioner of insurance as part of the legal reserve of suchinsurance company;
(c) stock in a holding corporation: (1) If 5% or less of the outstandingshares of stock of such holding corporation is acquired, the provisions of K.S.A.40-2a08, and amendments thereto, shall apply; (2) if at least 55% of theholding corporation's voting stock is acquired, the prior approval of thecommissioner shall be requiredand the provisions of K.S.A. 40-2a08, and amendments thereto, shallnot apply. No insurer may purchase in excess of 5% of the outstanding votingstock of a holding corporation unless suchinsurer acquires at least 55% of such stock, nor shall theofficers and directors of an insurer collectively own or control, directlyor indirectly, more than 25% of such stock. The commissioner may directan insurer to divest of its ownership in a holding corporation acquiredpursuant to this subsection if it appears to the commissionerthat the continued ownership or operation of the holding corporation isnot in the best interest of the policyholders, or if the insurer's ownershipin the holding corporation is less than 55% of the outstandingvoting stock of the holding corporation, or if the officers and directorsof the insurer collectively own or control, directly or indirectly, morethan 25% of such stock. A holding corporation acquired pursuant to thissubsection shall not acquire any investment not permitted for insurancecompanies other than life pursuant to article 2a of chapter 40 of the KansasStatutes Annotated, and amendments thereto. In valuing the stock of anyholding corporation acquiredunder this subsection in the annual financial statement of the insurer,value shall be assigned to the holding corporation's assets as though theassets were owned directly by the insurer. A percentage of the holding corporation'sassets exactly equal to the insurer's ownership interest in the holdingcorporation will be added to the assets of the insurer in application ofthe insurer's investment limitations set forth in article 2a of chapter40 of the Kansas Statutes Annotated, and amendments thereto. Stock in aholding corporation acquiredunder this subsectionshall not be eligible for deposit with the commissioner of insurance aspart of the legal reserves of such insurer.
History: L. 1972, ch. 173, § 9; L. 1979, ch. 139, § 1; L. 1982,ch. 200, § 1; L. 1983, ch. 156, § 2;L. 1987, ch. 161, § 1;L. 1994, ch. 86, § 1; July 1.