23-69-142. Mergers and consolidations and acquisition by exchange of stock.

23-69-142. Mergers and consolidations and acquisition by exchange of stock. (a)(1) A domestic stock insurer may merge or consolidate with one (1) or more domestic or foreign stock insurers authorized to transact insurance in this state by complying with the other applicable provisions of this chapter and subject to subsections (a) and (b) of this section. (2) Further, any domestic stock insurance company may adopt a plan of exchange of the outstanding stock of its stockholders for the consideration herein designated to be paid or provided by a person that acquires the stock in the manner provided in this chapter by complying with the other applicable provisions of this chapter, subject to subsections (a) and (b) of this section. (3) As consideration for the stock of a domestic insurer, the plan of exchange may provide that the acquiring person: (A) Transfer shares of its stock; (B) Transfer other securities issued by it; (C) Pay cash therefor; (D) Pay or provide other consideration; or (E) Pay or provide any combination of the foregoing types of consideration. (b)(1) As used in this section and §§ 23-69-146 and 23-69-147, “acquiring person” means any individual, any stock insurance corporation incorporated under the Arkansas Insurance Code or under prior laws of this state relating to the incorporation of domestic insurance corporations, any stock corporation incorporated under the Arkansas Business Corporation Act, § 4-26-101 et seq., or under prior laws of this state authorizing the establishment of business corporations and any foreign or alien stock corporation qualified to do business in Arkansas, and any foreign or alien stock insurance company authorized to do business in Arkansas. (2) “Acquiring person” shall also be deemed to include a depository institution or any affiliate thereof as appropriate under applicable federal law. (c)(1)(A) No merger or consolidation or exchange of stock shall be effectuated unless the plan or agreement has been filed in advance with the Insurance Commissioner and approved in writing by him or her after a hearing thereon. (B)(i) With regard to proposed affiliations between a depository institution, or any affiliate, and an insurer, the hearing shall be concluded and the order issued within the sixty-day period preceding the effective date of the transaction, and these orders shall be final upon entry, pursuant to federal law. (ii) Further, any restoration of capital or surplus or special surplus required for approval of the transaction affecting the depository institution's affiliate or subsidiary shall also be accomplished within the same sixty-day period. (2) The commissioner shall give approval within a reasonable time after the filing unless he or she finds that the plan or agreement: (A) Is contrary to law; (B) Is inequitable to the stockholders of any domestic insurer involved; or (C) Would substantially reduce the security of and service to be rendered to policyholders of the domestic insurer in this state or elsewhere. (3) In reviewing any plan or agreement, the commissioner may consider whether any proposed owner, purchaser, director, or officer of the acquiring party was subject to: (A) Any conviction for any felony or misdemeanor, other than minor traffic violations, during the past twenty (20) years; (B) A misconduct order by a regulatory agency or a court of competent jurisdiction or was found to be in violation of any insurance laws by a misconduct order of the commissioner or of another state's insurance commissioner; (C) An order by a regulatory agency or a court of competent jurisdiction and was found to have committed any unfair insurance trade practice or fraud; or (D) Having an insurance producer license or its equivalent denied, suspended, or revoked in any other state, province, district, or territory or foreign or alien country. (d) No director, officer, agent, or employee of any insurer party to merger, consolidation, or exchange of stock shall receive any fee, commission, compensation, or other valuable consideration whatsoever for in any manner aiding, promoting, or assisting therein except as set forth in the plan or agreement. (e) If the commissioner does not approve a plan or agreement, he or she shall so notify the insurer in writing specifying his or her reasons therefor. (f) If any domestic insurer involved in the proposed merger, consolidation, or exchange of stock is authorized to transact insurance also in other states, the commissioner may request the insurance commissioner, director of insurance, superintendent of insurance, or other similar public insurance supervisory official of the two (2) other states in which the insurer has in force the larger amounts of insurance, to participate in the hearing provided for under subsection (c) of this section, with full right to examine all witnesses and evidence and to offer to the commissioner such pertinent information and suggestions as they may deem proper. (g) Any plan or proposal through which one (1) insurer or other acquiring person acquires or proposes to acquire a controlling interest of the capital stock of the domestic insurer is deemed to be a plan or proposal of merger, consolidation, or exchange of stock for purposes of this section and is subject to the requirements of subsections (c)-(f) of this section.