40-3310. Enjoining violations; illegally acquired securities; effect on shareholder voting; injunctions; seizure or sequestration of illegally acquired securities; situs of ownership of domestic insur
40-3310
40-3310. Enjoining violations; illegally acquired securities; effect on shareholder voting; injunctions; seizureor sequestration of illegally acquired securities; situs of ownership of domesticinsurer's securities.(a) Whenever it appears to the commissioner of insurance that anyinsurer or any director, officer, employee or agent thereof hascommitted or is about to commit a violation of this act or of any rule,regulation, or order issued by the commissioner of insurance hereunder,the commissioner of insurance may apply to the district court in and forthe county in which the principal office of the insurer is located or ifsuch insurer has no such office in this state then to the district courtof Shawnee county for an order enjoining such insurer or such director,officer, employee or agent thereof from violating or continuing toviolate this act or any such rule, regulation or order, and for suchother equitable relief as the nature of the case and the interests ofthe insurer's policyholders, creditors and shareholders or the publicmay require.
(b) No security which is the subject of any agreement or arrangementregarding acquisition, or which is acquired or to be acquired, incontravention of the provisions of this act or of anyrules and regulationsor order issued by the commissioner of insurance hereunder may be votedat any shareholders' meeting, or may be counted for quorum purposes, andany action of shareholders requiring the affirmative vote of apercentage of shares may be taken as though such securities were notissued and outstanding. However, no action taken at any suchmeeting shall beinvalidated by the voting of such securities, unless the action wouldmaterially affect control of the insurer or unless the courts of thisstate have so ordered. If an insurer or the commissioner of insurancehas reason to believe that any security of the insurer has been or isabout to be acquired in contravention of the provisions of this act orof any rule, regulation or order issued by the commissioner of insurancehereunder the insurer or the commissioner of insurance may apply to thedistrict court of Shawnee county or to the district court for the countyin which the insurer has its principal place of business to enjoin anyoffer, request, invitation, agreement or acquisition made incontravention of K.S.A. 40-3304 and amendments thereto or any rules and regulations, or orderissued by the commissioner of insurance thereunder to enjoin the votingof any security so acquired, to void any vote of such securityalreadycast at any meeting of shareholders, and for such other equitable reliefas the nature of the case and the interests of the insurer'spolicyholders, creditors and shareholders or the public may require.
(c) In any case where a person has acquired or is proposing toacquire any voting securities in violation of this act or any rule,regulation or order issued by the commissioner of insurance hereunder,the district court of Shawnee county or the district court for thecounty in which the insurer has its principal place of business may, onsuch notice as the court deems appropriate, upon the application of theinsurer or the commissioner of insurance seize or sequester any votingsecurities of the insurer owned directly or indirectly by such person,and issue such orders with respect thereto as may be appropriate toeffectuate the provisions of this act. Notwithstanding any otherprovisions of law, for the purposes of this act the situs of theownership of the securities of domestic insurers shall be deemed to bein this state.
History: L. 1974, ch. 183, § 10;L. 1992, ch. 288, § 6; July 1, 1993.