Pennsylvania Act 1974-266 — ALIEN INSURER DOMESTICATION LAW

Act text

ALIEN INSURER DOMESTICATION LAW
                 Act of Dec. 10, 1974, P.L. 804, No. 266              Cl. 40
                                  AN ACT

     Relating to the domestication of alien insurers transacting
        business in the Commonwealth of Pennsylvania through transfer
        of all the business, assets and liabilities in the United
        States of the alien insurer to a wholly owned stock insurance
        company incorporated under the laws of the Commonwealth of
        Pennsylvania; regulating the terms and conditions of such
        domestication and the steps to be taken and the acts to be
        performed for the adoption, approval and execution thereof;
        providing for the transfer of deposits and trusteed assets
        and providing for the maintenance of deposits.

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

        Section 1.  Definitions.--As used in this act:
        (1)  "Alien insurer" means any insurer incorporated or
     organized under the laws of any foreign nation or of any
     province or territory other than a state of the United States,
     the Commonwealth of Puerto Rico or the District of Columbia.
        (2)  "Domestication" means the reorganization of the United
     States branch of an alien insurer as the result of which a
     domestic stock insurance company shall succeed to all the
     business and assets and assume all the liabilities of the United
     States branch of the alien insurer.
        (3)  "United States branch" means the business unit through
     which business is transacted within the United States by an
     alien insurer and the assets and liabilities of such insurer
     within the United States pertaining to such business.
        (4)  "Regulatory state" means the state in the United States
     pursuant to the laws of which the assets of the United States
     branch of the alien insurer are trusteed.
        (5)  "Domestic insurer" means a stock insurance company
     incorporated under the laws of the Commonwealth of Pennsylvania.
        Section 2.  Alien Insurers.--Upon compliance with the
     provisions of this act, an alien insurer now or hereafter
     licensed to do business in this State which owns beneficially,
     directly or indirectly, all of the outstanding capital stock
     (other than directors' qualifying shares) of any domestic
     insurer incorporated for the purpose of transacting the same or
     similar classes of insurance which the United States branch of
     the alien insurer is qualified and licensed to transact, may,
     with the prior written approval of the Insurance Commissioner
     and of the insurance supervisory official of the regulatory
     State of the United States branch of the alien insurer and
     subject to the final approval of the Insurance Commissioner and
     of the aforesaid supervisory official, domesticate its United
     States branch by entering into an agreement in writing with the
     domestic insurer providing for the acquisition by the domestic
     insurer of the business and assets of the United States branch
     of the alien insurer and the assumption by the domestic insurer
     of all of the liabilities of the United States branch for no
     consideration other than the assumption of such liabilities
     except the agreement may further provide for additional
     consideration payable by the issuance by the domestic insurer of
     shares of its capital stock. For the purposes of this act, those
     shares of capital stock of the domestic insurer or voting trust
     certificates representing said shares, as are held among the
     trusteed assets of the United States branch of the alien insurer
     or are held in a trust created by the alien insurer and of which
     the alien insurer is a beneficiary shall be deemed to be shares
     held beneficially, but indirectly, by an alien insurer. The
     acquisition of assets and assumption of liabilities of the
     United States branch by the domestic insurer shall be affected
     by the filing of an instrument of transfer and assumption with
     the insurance supervisory official of the regulatory state which
     instrument shall be in form satisfactory to the Insurance
     Commissioner and the aforesaid supervisory official and shall be
     executed by the alien insurer and the domestic insurer.
        Section 3.  Authorization and Execution of Domestication
     Agreement.--The domestication agreement shall be authorized,
     adopted, approved, signed, and acknowledged by the alien insurer
     in accordance with the laws of the country under which it is
     organized. In the case of the domestic insurer, the
     domestication agreement shall be adopted by resolution of its
     board of directors and executed by its president or any vice
     president and attested by its secretary or assistant secretary
     under its corporate seal.
        Section 4.  Approval by Insurance Commissioner.--An executed
     counterpart of the domestication agreement, together with
     certified copies of the corporate proceedings of the domestic
     insurer and the alien insurer approving, adopting and
     authorizing the execution of said domestication agreement shall
     be submitted to the Insurance Commissioner for his approval. The
     Insurance Commissioner shall thereupon consider said agreement
     and if satisfied the same is in accordance with the provisions
     of this act and if he shall find that the interest of
     policyholders and creditors in the Commonwealth of Pennsylvania
     of the United States branch of the alien insurer and of the
     domestic insurer are not materially adversely affected he shall
     approve such domestication agreement and certify such approval
     in writing to the insurance supervisory official of the
     regulatory state.
        Section 5.  Consummation of Domestication Agreement; Transfer
     of Deposits.--Upon the filing with the Insurance Commissioner of
     a certified copy of the instrument of transfer and assumption
     pursuant to which the domestic insurer succeeds to the business
     and assets of the United States branch of an alien insurer and
     assumes all its liabilities as provided by this act and upon
     compliance with all the requirements of the laws and of the
     insurance supervisory official of the regulatory state
     regulating the terms and conditions of the domestication and the
     steps to be taken and the acts to be performed for the adoption,
     approval and execution of the domestication, the domestication
     of the United States branch shall be deemed effective; and
     thereupon all the rights, franchises and interests of said
     United States branch in and to every species of property, real
     and personal and mixed, and things in action thereunto belonging
     shall be deemed as transferred and vested in said domestic
     insurer, without any other deed or transfer and simultaneously
     therewith said domestic insurer shall be deemed to have assumed
     all of the obligations and liabilities of said United States
     branch and shall be held liable to pay and discharge all its
     debts and liabilities in the same manner as if they had been
     incurred and contracted by the domestic insurer. No action or
     proceeding pending at the time of domestication, in which either
     the United States branch or the domestic insurer may be a party,
     shall abate or discontinue by reason of the domestication but
     the same may be prosecuted to final judgment in the same manner
     as if the domestication had not taken place or the domestic
     company may be substituted in place of the United States branch
     by order of the court in which the action or proceeding is
     pending. All deposits of the United States branch held by the
     Insurance Commissioner or other regulatory agency in this
     Commonwealth shall be deemed held as security that said domestic
     insurer will fully perform its obligations including its
     assumption under the domestication agreement to all
     policyholders and creditors within the United States of the
     United States branch and of the domestic insurer and such
     deposits including all deposits of the United States branch and
     all of its assets held in trust pursuant to the laws of any
     other state or territory or jurisdiction of the United States
     shall be deemed to be assets of the domestic insurer and shall
     be reported as such in the annual statements and other reports
     which said domestic insurer may be required to file in this
     Commonwealth and upon the ultimate release by the Insurance
     Commissioner or other agency of this or any other state,
     territory or jurisdiction of the United States of any such
     deposits, the securities and cash constituting such released
     deposit shall be delivered and paid over to said domestic
     insurer as the lawful successor in interest to said United
     States branch.
        Section 6.  Repeals.--All acts and parts of acts are repealed
     in so far as they are inconsistent herewith.