A. Not more than forty-nine percent (49%) of the equity securities of any insurer shall be sold to any person, firm, corporation or trustee or nominee thereof where said insurer has been organized within two (2) years preceding the acquisition of such equity securities, unless the stock so sold or acquired shall have been at a price not less than the highest market value of such stock during two (2) years subsequent to incorporation or the highest price at which such stock is offered to the public during two (2) years subsequent to incorporation, whichever sum is the greater. Should more than forty-nine percent (49%) of the equity securities of any insurer be sold to any person, firm, corporation or trustee or nominee thereof at a price less than the highest market price or the highest price such stock is offered to the public during the first two (2) years subsequent to incorporation, such excess between the purchase price and such highest market or highest offering price shall inure to and be recoverable by the insurer, unless such equity security was acquired in good faith in connection with a debt previously contracted, irrespective of any intention on the part of such purchaser in entering into such transaction.

B. Suit to recover such profit may be instituted at law or in equity in any court of competent jurisdiction by the insurer or by the owner of any equity security of the insurer in the name of and in behalf of the insurer if the insurer shall fail or refuse to bring suit within sixty (60) days after request or shall fail to diligently prosecute the same thereafter. If no suit to recover the difference between the purchase price and such highest market or highest offered price is filed within six (6) months after the realization of such profit or after the expiration of two (2) years subsequent to the incorporation of the insurer, or if at any time such suit is not diligently prosecuted, the Insurance Commissioner may file or prosecute such suit for and on behalf of the insurer at the expense of the insurer.

C. If the Insurance Commissioner shall find from substantial evidence submitted that for the best interest of the policyholders or creditors of an insurer the Commissioner should approve some plan of merger, consolidation, rehabilitation or sale of such insurer but is prevented or hindered from doing so because of the provisions of this section, the Commissioner may order that said transaction be exempt from the provisions of this section.

Added by Laws 1965, c. 341, § 2, emerg. eff. June 28, 1965. Amended by Laws 1997, c. 418, § 102, eff. Nov. 1, 1997.