38.2-4233 - Commission approval required for certain transactions.
§ 38.2-4233. Commission approval required for certain transactions.
A. Prior written approval of the Commission shall be required for anytransaction between a nonstock corporation licensed under this chapter andany of its affiliates, if such transaction involves more than three-fourthsof one percent of admitted assets or five percent of surplus as of theimmediately preceding December 31, whichever is less. Failure of theCommission to act within sixty days after notification by the nonstockcorporation shall constitute approval of the transaction.
B. Nothing contained in this section shall authorize or permit anytransaction that would be otherwise contrary to law.
C. The Commission, in reviewing any transaction under this section, shallconsider whether the transaction complies with the standards set forth in §38.2-4232. The Commission shall set forth the specific reasons for thedisapproval of any transaction.
D. The approval of any transaction under this section shall be deemed anamendment under subsection D of § 38.2-4231 to a nonstock corporation'sregistration statement without further filing.
E. The Commission shall have continuing oversight over the terms andconditions of all continuing transactions by a nonstock corporation licensedunder this chapter with its affiliates. The Commission may prohibit thecontinuation of any continuing transaction if the Commission finds that,because of changed circumstances or material information unknown to theCommission at the time of the approval of the transaction, the transactiondoes not comply with the standards set forth in § 38.2-4232.
F. Existing transactions entered into between a nonstock corporation and itsaffiliates prior to July 1, 1989, shall be filed with the Commission forapproval no later than September 1, 1989, if such transaction involves morethan three-fourths of one percent of admitted assets or five percent ofsurplus as of the immediately preceding December 31, whichever is less.Failure of the Commission to act within 120 days after such filings shallconstitute approval of such transactions. The Commission shall not disapproveany transaction entered into prior to July 1, 1989, if such transaction waslawful when entered into, but if any such transaction is found not to meetthe standards of this section, such transaction shall not be renewed orextended except upon terms approved by the Commission.
G. Any nonstock corporation aggrieved by a disapproval or withdrawal ofapproval under this section may proceed under the provisions of § 38.2-222.
H. For the purposes of this section, a "transaction between a nonstockcorporation licensed under this chapter and any of its affiliates" includesany transaction between a nonstock corporation licensed under this chapterand a nonaffiliate if such transaction involves (i) any loan or extension ofcredit where the licensee makes such loan or extension of credit with theagreement or understanding that the proceeds of such transaction, in whole orsubstantial part, are to be used to make any loan or extension of credit to,to purchase assets of, or to make investments in any affiliate of thelicensee or (ii) any reinsurance agreement or risk-sharing arrangement, ormodifications thereto, which requires as consideration the transfer of assetsfrom a licensee to a nonaffiliate, if an agreement or understanding existsbetween the licensee and the nonaffiliate that any portion of such assetswill be transferred to one or more affiliates of the licensee.
(1989, c. 606; 1993, c. 158.)