40-3301. Declaration of public interest and policy.
40-3301
40-3301. Declaration of public interest and policy.(a) It is hereby found and declared that it may not be inconsistent withthe public interest and the interest of policyholders to permit insurers to:
(1) Engage in activities which would enable them to make better use ofmanagement skills and facilities;
(2) diversify into new lines of business through acquisition ororganization of subsidiaries;
(3) have free access to capital markets which could provide funds forinsurers to use in diversification programs;
(4) implement sound tax planning conclusions; and
(5) serve the changing needs of the public and adapt to changingconditions of the social, economic and political environment, so thatinsurers are able to compete effectively and to meet the growing publicdemand for institutions capable of providing a comprehensive range offinancial services.
(b) It is further found and declared that the public interest and theinterests of policyholders are or may be adversely affected when:
(1) Control of an insurer is sought by persons who would utilize suchcontrol adversely to the interests of policyholders;
(2) acquisition of control of an insurer would substantially lessencompetition or create a monopoly in the insurance business in this state;
(3) an insurer which is part of a holding company system is caused toenter into transactions or relationships with affiliated companies on termswhich are not fair and reasonable; or
(4) an insurer pays dividends which jeopardize the financial condition ofsuch insurer.
(c) It is hereby declared that the policies and purposes of this act areto promote the public interest by:
(1) Facilitating the achievement of the objectives enumerated insubsection (a) of this section;
(2) requiring disclosure of pertinent information relating to changes incontrol of an insurer;
(3) requiring disclosure by an insurer of material transactions andrelationships between the insurer and its affiliates, including certaindividends paid by the insurer; and
(4) providing standards governing material transactions between theinsurer and its affiliates.
(d) It is further declared that it is desirable to prevent unnecessarymultiple and conflicting regulation of insurers. Therefore, this stateshall exercise regulatory authority over domestic insurers and, unlessotherwise provided in this act, not over nondomestic insurers, with respectto the matters contained herein.
History: L. 1974, ch. 183, § 1; L. 1990, ch. 173, § 1; April 12.