Page:United States Statutes at Large Volume 88 Part 1.djvu/797

 88 STAT. ]

PUBLIC LAW 93-388-AUG. 24, 1974 SUBSIDIARIES

OF

INSURERS

SEC. 3. (a) AUTHORIZATION.—Any domestic insurer, either by itself or in cooperation with one or more persons, may, subject to the limitation stated in subsection (b) of this section, organize or acquire one or more subsidiaries. Such subsidiaries may conduct any kind of business or businesses and their authority to do so shall not be limited by reason of the fact that they are subsidiaries of a domestic insurer. (b) LrMiTED ADDITIONAL INVESTMENT AUTHORITY.— (1) The total amount which a domestic insurer may invest in the common stock, preferred stock, debt obligations, and other securities of the subsidiaries referred to in subsection (a) of this section shall not exceed the lesser of (A) 5 per centum of such insurer's assets, or (B) in the case of a capital stock company, 50 per centum of the excess of its capital, surplus, and contingency reserves over the then required statutory minimum capital and surplus, or, in the case of a mutual company, 50 per centum of the excess of its surplus and contingency reserves over the then required statutory minimum surplus. (2) In calculating the amount of such investments, there shall be included (A) total net moneys or other consideration expended and obligations assumed in the acquisition or formation of a subsidiary, including all organizational expenses and contributions to capital and surplus of such subsidiary, whether or not represented by the purchase of capital stock or issuance of other securities, and (B) all amounts expended in acquiring additional common stock, preferred stock, debt obligations, and other securities, and all contributions to the capital or surplus of a subsidiary subsequent to its acquisition or formation. (c)

753

D.C. Code 351902.

EXEMPTIONS FROM INVESTMENT RESTRICTIONS.—The invest-

ments permitted under this section shall be in addition to the investments in common stock, preferred stock, debt obligations, and other securities permitted under sections 35 and 41 of chapter III of the Life Insurance Act (D.C. Code, secs. 35-535 and 35-541) and section 18, chapter II, of the Fire and Casualty Act (D.C. Code, sec. 35-1321), and the investments under this section shall not be subject to any of the otherwise applicable restrictions or prohibitions contained in the aforesaid sections of law applicable to such investments of insurers. (d) QUALIFICATIONS or INVESTMENT: W H E N DETERMINED.—Whether

any investment pursuant to this section meets the applicable requirements thereof is to be determined immediately after such investment is made, taking into account the then outstanding principal balance of all previous investments and debt obligations and the value of all previous investments in equity securities as of the date of the new investment. (e) CESSATION OF CONTROL.—If an insurer ceases to control a subsidiary, it shall dispose of any investment therein made pursuant to this section within three years from the time of the cessation of control or within such further time as the Commissioner may prescribe, unless at any time after such investment was made, such investment meets the requirements for investment under sections 35 and 41, chapter III, of the Life Insurance Act (D.C. Code, secs. 35-535 and 35-541) and section 18, chapter II, of the Fire and Casualty Act (D.C. Code, sec. 35-1521), and the insurer has notified the Commissioner thereof. ACQUISITION OF CONTROL OF OR MERGER WITH DOMESTIC INSURER

4. (a) FILING REQUIREMENTS.—No person other than the issuer shall make a tender offer for or a request or invitation for tenders of, SEC.

D.C. Code 351903.

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