Pennsylvania Act 1968-45 — PROHIBITING BORROWING OR RENTAL OF SECURITIES BY INSURANCE COMPANIES

Act text

PROHIBITING BORROWING OR RENTAL OF SECURITIES BY INSURANCE COMPANIES
                  Act of Apr. 17, 1968, P.L. 95, No. 45               Cl. 40
                                  AN ACT

     Making unlawful the borrowing or rental of securities by
        insurance companies and affiliated companies or individuals,
        and providing penalties.

        The General Assembly of the Commonwealth of Pennsylvania
     hereby enacts as follows:

        Section 1.  Any member, officer, director, or attorney-in-
     fact of any company, association, or exchange licensed to do an
     insurance business in this Commonwealth, who, on behalf of such
     company, association, or exchange, borrows, rents, hires,
     leases, or otherwise engages the use of stocks, bonds,
     debentures, notes, investment certificates, securities, or other
     obligations or evidences of indebtedness owned or issued by any
     other corporation, company, association, or individual, or of
     any government, political subdivision or agency thereof, with
     intent to injure or defraud any other company, body politic or
     corporation, or person, or to deceive the Insurance Commissioner
     or other person legally authorized to examine the affairs of any
     such company, association, or exchange, is guilty of a felony.
        Section 2.  Any corporation organized under any law of this
     Commonwealth, or the laws of any other state, or which has an
     office or is transacting business in this Commonwealth, which is
     engaged in, or is claiming or advertising that it is engaged in,
     organizing or receiving subscriptions for or disposing of stocks
     of, or in any manner aiding or taking part in the formation or
     in the business of an insurance company, association, or
     exchange, either as agent or otherwise, or which is holding
     capital stock of one or more insurance companies for the purpose
     of controlling the management thereof as voting trustees or
     otherwise, or any employe, agent, or attorney thereof, that aids
     and abets such insurance company, association, or exchange in
     borrowing, renting, hiring, leasing, or engaging the use of such
     stocks, bonds, debentures, notes, investment certificates,
     securities, or other obligations or evidences of indebtedness,
     is guilty of a felony.
        Section 3.  Any individual who has been convicted under
     sections 1 or 2 of this act shall be sentenced to imprisonment
     for a term of not more than seven years, or be sentenced to pay
     a fine not exceeding ten thousand dollars ($10,000), or both.
        Section 4.  Any corporation that has been convicted under
     section 2 of this act shall be sentenced to pay a fine not
     exceeding ten thousand dollars ($10,000).
        Section 5.  If any insurance company, association, or
     exchange is found in possession of stocks, bonds, debentures,
     notes, investment certificates, securities, or other obligations
     or evidences of indebtedness acquired in violation of section 1
     of this act, or if any of its officers, directors, members, or
     attorneys-in-fact have been convicted under section 1, such
     company, association, or exchange may be subject to suspension
     of its certificate of authority by the Insurance Commissioner.
     Nothing in this section shall be construed to prevent the
     Insurance Commissioner from bringing an action to dissolve such
     insurance company, association, or exchange, under the
     provisions of Article V of the act of May 17, 1921 (P.L.789),
     known as "The Insurance Department Act of one thousand nine
     hundred and twenty-one."