Virginia Code 38.2-4233: Commission approval required for certain transactions
A. Prior written approval of the Commission shall be required for any transaction between a nonstock corporation licensed under this chapter and any of its affiliates, if such transaction involves more than three-fourths of one percent of admitted assets or five percent of surplus as of the immediately preceding December 31, whichever is less. Failure of the Commission to act within sixty days after notification by the nonstock corporation shall constitute approval of the transaction.
Terms Used In Virginia Code 38.2-4233
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Commission: means the State Corporation Commission. See Virginia Code 38.2-100
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Includes: means includes, but not limited to. See Virginia Code 1-218
- Nonstock corporation: means a foreign or domestic nonstock corporation which is subject to regulation and licensing under this chapter and which offers or administers subscription contracts to contract holders as part of a plan. See Virginia Code 38.2-4201
- Oversight: Committee review of the activities of a Federal agency or program.
- Surplus: means the excess of total admitted assets over the liabilities of a nonstock corporation licensed under this chapter, and shall include any contingency reserves maintained pursuant to § 38. See Virginia Code 38.2-4230
- Transaction: means any (i) sale, purchase, exchange, renting or leasing arrangement, loan or extension of credit, arrangement for the assumption, extension or renewal of any obligation or liability, guaranty or surety arrangement, or investment; (ii) dividend or distribution of cash or property; (iii) reinsurance treaty or risk-sharing arrangement; (iv) management contract, service contract or cost-sharing arrangement; or (v) other arrangement, relationship or dealings that the Commission by order, rule or regulation determines to be a transaction contemplated by this article. See Virginia Code 38.2-4230
B. Nothing contained in this section shall authorize or permit any transaction that would be otherwise contrary to law.
C. The Commission, in reviewing any transaction under this section, shall consider whether the transaction complies with the standards set forth in § 38.2-4232. The Commission shall set forth the specific reasons for the disapproval of any transaction.
D. The approval of any transaction under this section shall be deemed an amendment under subsection D of § 38.2-4231 to a nonstock corporation’s registration statement without further filing.
E. The Commission shall have continuing oversight over the terms and conditions of all continuing transactions by a nonstock corporation licensed under this chapter with its affiliates. The Commission may prohibit the continuation of any continuing transaction if the Commission finds that, because of changed circumstances or material information unknown to the Commission at the time of the approval of the transaction, the transaction does not comply with the standards set forth in § 38.2-4232.
F. Existing transactions entered into between a nonstock corporation and its affiliates prior to July 1, 1989, shall be filed with the Commission for approval no later than September 1, 1989, if such transaction involves more than three-fourths of one percent of admitted assets or five percent of surplus as of the immediately preceding December 31, whichever is less. Failure of the Commission to act within 120 days after such filings shall constitute approval of such transactions. The Commission shall not disapprove any transaction entered into prior to July 1, 1989, if such transaction was lawful when entered into, but if any such transaction is found not to meet the standards of this section, such transaction shall not be renewed or extended except upon terms approved by the Commission.
G. Any nonstock corporation aggrieved by a disapproval or withdrawal of approval under this section may proceed under the provisions of § 38.2-222.
H. For the purposes of this section, a “transaction between a nonstock corporation licensed under this chapter and any of its affiliates” includes any transaction between a nonstock corporation licensed under this chapter and a nonaffiliate if such transaction involves (i) any loan or extension of credit where the licensee makes such loan or extension of credit with the agreement or understanding that the proceeds of such transaction, in whole or substantial 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 the licensee or (ii) any reinsurance agreement or risk-sharing arrangement, or modifications thereto, which requires as consideration the transfer of assets from a licensee to a nonaffiliate, if an agreement or understanding exists between the licensee and the nonaffiliate that any portion of such assets will be transferred to one or more affiliates of the licensee.
1989, c. 606; 1993, c. 158.