(a) Any domestic insurance company with capital stock may, with the prior approval of the commissioner, issue its capital stock within the limit of its authorized capital in exchange for outstanding stock of another domestic insurance company or of a foreign or alien insurance company, or partly in exchange for such stock and partly for cash. Such an exchange shall require the prior approval of the domestic company's stockholders, unless, immediately prior to the exchange, the domestic company owns beneficially or of record ninety per cent or more of the outstanding voting securities of the insurance company whose shares are being acquired.

(b) Whenever an insurance company proposes to issue its stock in exchange for outstanding stock of another insurance company, it shall bring its petition to the commissioner, setting forth the terms and conditions of the proposed exchange offer. The commissioner shall thereafter hold a hearing upon the fairness of the terms and conditions of the proposed issuance and exchange of stock, at which hearing any policyholder or stockholder of any company or other interested party shall have the right to appear.

(c) Notice of the hearing shall be given by publication in a newspaper of general circulation in the city of Hartford, and in such other city or cities as the commissioner may direct, once a week for three successive weeks, and the commissioner shall require that written notice be mailed to all stockholders of the petitioner and of any other company whose stockholders may be entitled to exchange their stock for stock of the petitioner. The commissioner may require such other notice as, under the circumstances, he deems appropriate. The commissioner, in his discretion, may waive all notice requirements if immediately prior to the exchange the domestic company owns beneficially or of record ninety per cent or more of the outstanding voting securities of the insurance company whose shares are being acquired.

(d) The commissioner may, if he finds that the interest of the policyholders and stockholders of all companies are protected and that the terms and conditions of the proposed issuance and exchange of stock are fair and reasonable, approve and authorize the issuance and exchange of stock. All expenses in connection with the proceedings shall be borne by the petitioner or petitioners.

(e) In the event of any proposed issuance and exchange of stock which is for the purpose or has the effect of acquiring control of a domestic insurance company, the provisions of sections 38a-129 to 38a-140, inclusive, shall apply.

(1955, S. 2814d; 1957, P.A. 123, S. 1; P.A. 79-103; P.A. 90-243, S. 12; P.A. 92-112, S. 32, 35.)

History: P.A. 79-103 allowed issuance of stock in exchange for stock of another company without stockholders' prior approval where “immediately prior to the exchange, the domestic company owns beneficially or of record 90% or more of the outstanding voting securities of the outstanding voting securities of the other insurance company whose shares are being acquired” and added similarly worded exception to notice requirement; P.A. 90-243 divided section into Subsecs., made technical corrections re inclusion of references of “foreign” and “alien” and added a provision in which the commissioner may waive notice requirement in an exchange of stock if the domestic company has an interest of 90% or more; Sec. 38-35 transferred to Sec. 38a-152 in 1991; P.A. 92-112 added new Subsec. (e) re proposed issuance or exchange of stock to acquire control of a domestic insurance company.