HB 1169

1	A bill to be entitled
2	An act relating to public records; amending s. 628.461,
3	F.S.; providing an exemption from public records
4	requirements for notice of a proposed divestiture in a
5	domestic insurer provided to the Commissioner of Insurance
6	pursuant to the acquisition of a domestic stock insurer;
7	specifying duration of the exemption; providing an
8	exemption from public records requirements for the
9	identity of a lender pursuant to a merger or other
10	acquisition of control of a domestic stock insurer where a
11	source of consideration is a loan made in the lender's
12	ordinary course of business, upon request of the lender;
13	providing for future legislative review and repeal of the
14	exemptions; providing a statement of public necessity;
15	providing a conditional effective date.
16
17	Be It Enacted by the Legislature of the State of Florida:
18
19	Section 1.  Paragraph (a) of subsection (2) and paragraph
20	(a) of subsection (3) of section 628.461, Florida Statutes, as
21	amended by HB 1167, 2011 Regular Session, are amended to read:
22	628.461  Acquisition of controlling stock.-
23	(2)  FILING REQUIREMENTS; PUBLIC RECORDS EXEMPTION.-A
24	person may not, individually or in conjunction with any
25	affiliated person of such person, acquire directly or
26	indirectly, conclude a tender offer or exchange offer for, enter
27	into any agreement to exchange securities for, or otherwise
28	finally acquire 10 percent or more of the outstanding voting
29	securities of a domestic stock insurer or of a controlling
30	company, unless at the time the offer, request, or invitation is
31	made or the agreement is entered into, or prior to the
32	acquisition of the securities if no offer or agreement is
33	involved, such person has filed with the commissioner and has
34	sent to the insurer, a statement containing the information
35	required by this section and the offer, request, invitation,
36	agreement, or acquisition has been approved by the commissioner
37	in the manner prescribed in this section.
38	(a)1.  For purposes of this section, any controlling person
39	of a domestic insurer seeking to divest its controlling interest
40	in the domestic insurer in any manner shall file with the
41	commissioner, with a copy provided to the insurer, notice of its
42	proposed divestiture at least 30 days prior to the cessation of
43	control. The commissioner shall determine those instances in
44	which the party or parties seeking to divest a controlling
45	interest in an insurer will be required to file for and obtain
46	approval of the transaction.
47	2.  Notice of a proposed divestiture in a domestic insurer
48	provided to the commissioner by a controlling person of a
49	domestic insurer under subparagraph 1. is confidential and
50	exempt from s. 119.07(1) and s. 24(a), Art. I of the State
51	Constitution. Information contained in the notice remains
52	confidential until the conclusion of the transaction unless the
53	commissioner, in his or her discretion, determines that
54	confidential treatment will interfere with the enforcement of
55	this section.
56	3.  Subparagraph 2. is subject to the Open Government
57	Sunset Review Act in accordance with s. 119.15 and shall stand
58	repealed on October 2, 2016, unless reviewed and saved from
59	repeal through reenactment by the Legislature.
60	(3)  CONTENT OF STATEMENT.-
61	(a)  The statement to be filed with the office and
62	furnished to the insurer and controlling company shall be made
63	under oath and contain the following information and any
64	additional information as the office deems necessary to
65	determine the character, experience, ability, and other
66	qualifications of the person or affiliated person of such person
67	for the protection of the policyholders and shareholders of the
68	insurer and the public:
69	1.  The name and address of each person by whom or on whose
70	behalf the merger or other acquisition of control referred to in
71	subsection (2) is to be effected, hereinafter referred to as the
72	"acquiring party," the background information on each natural
73	person by whom, or on whose behalf, the acquisition is to be
74	made, and, if the acquisition is to be made by or on behalf of a
75	corporation, association, or trust, the identity of, and the
76	background information specified in this section on, each
77	director, officer, trustee, or other natural person performing
78	duties similar to those of a director, officer, or trustee for
79	the corporation, association, or trust or any person who
80	controls, either directly or indirectly, the corporation,
81	association, or trust, and:
82	a.  If the person is an individual, his or her principal
83	occupation and all offices and positions held during the past 10
84	years, and any conviction of crimes other than minor traffic
85	violations during the past 10 years;
86	b.  Whether, during such 10-year period, the person has
87	been the subject of any proceeding for the revocation of any
88	license and, if so, the nature of the proceeding and the
89	disposition of the proceeding.
90	c.  Whether, during the 10-year period, the person has been
91	the subject of any proceeding under the Federal Bankruptcy Code
92	or whether, during the 10-year period, any corporation,
93	partnership, firm, trust, or association in which the person was
94	a director, officer, trustee, partner, or other official has
95	been subject to any such proceeding, either during the time in
96	which the person was a director, officer, trustee, partner, or
97	other official or within 12 months thereafter.
98	d.  Whether, during the 10-year period, the person has been
99	enjoined, either temporarily or permanently, by a court of
100	competent jurisdiction from violating any federal or state law
101	regulating the business of insurance, securities, or banking, or
102	from carrying out any particular practice or practices in the
103	course of the business of insurance, securities, or banking,
104	together with details as to any such event.
105	e.  If the person is not an individual, a report of the
106	nature of its business operations during the past 5 years or for
107	the period of time that the person and any predecessors have
108	been in existence, whichever is less, an informative description
109	of the business intended to be conducted by the person and the
110	person's subsidiaries, and a list of all individuals who are or
111	who have been selected to become directors, trustees, or
112	executive officers of the person, or who perform or will perform
113	functions appropriate to such positions. The list must include
114	for each individual the information required under subparagraph
115	(a)1.;
116	2.a.  The source, nature, and amount of the consideration
117	used or to be used in effecting the merger or other acquisition
118	of control, a description of any transaction where funds were or
119	are to be obtained for any such purpose, including any pledge of
120	the insurer's stock or the stock of any of its subsidiaries or
121	controlling affiliates, and the identity of persons furnishing
122	consideration.
123	b.  Where a source of consideration is a loan made in the
124	lender's ordinary course of business, the identity of the lender
125	is confidential and exempt from s. 119.07(1) and s. 24(a), Art.
126	I of the State Constitution, if the lender so requests.
127	c.  Sub-subparagraph b. is subject to the Open Government
128	Sunset Review Act in accordance with s. 119.15 and shall stand
129	repealed on October 2, 2016, unless reviewed and saved from
130	repeal through reenactment by the Legislature.
131	3.  Fully audited financial information as to the earnings
132	and financial condition of each acquiring party for the
133	preceding 5 fiscal years of each acquiring party, or for the
134	period the acquiring party and any predecessors have been in
135	existence, whichever is less, and similar unaudited information
136	as of a date not earlier than 90 days prior to the filing of the
137	statement;
138	4.  Any plans or proposals which each acquiring party may
139	have to liquidate the insurer, to sell its assets or merge or
140	consolidate it with any person, or to make any other material
141	change in its business or corporate structure or management;
142	5.  The number and class of shares of any security referred
143	to in subsection (2) that each acquiring party proposes to
144	acquire, the terms of the offer, request, invitation, agreement
145	or acquisition referred to in subsection (2), and a statement as
146	to the method used to determine the fairness of the proposal;
147	6.  The amount of each class of any security referred to in
148	subsection (2) which is beneficially owned or concerning which
149	there is a right to acquire beneficial ownership by each
150	acquiring party;
151	7.  A full description of any contracts, arrangement, or
152	understandings with respect to any security referred to in
153	subsection (2) in which any acquiring party is involved,
154	including, but not limited to, transfer of any of the
155	securities, joint ventures, loan or option arrangements, puts or
156	calls, guarantees of loans, guarantees against loss or
157	guarantees of profits, division of losses or profits, or the
158	giving or withholding of proxies. The description must identify
159	the persons with whom the contracts, arrangements, or
160	understandings have been entered into;
161	8.  A description of the purchase of any security referred
162	to in subsection (2) during the 12 calendar months preceding the
163	filing of the statement by any acquiring party, including the
164	dates of purchase, names of the purchasers, and consideration
165	paid or agreed to be paid;
166	9.  A description of any recommendations to purchase any
167	security referred to in subsection (2), made during the 12
168	calendar months preceding the filing of the statement by any
169	acquiring party or by anyone based upon interviews or at the
170	suggestion of the acquiring party;
171	10.  Copies of all tender offers for, requests or
172	invitations for tenders of, exchange offers for, and agreements
173	to acquire or exchange any securities referred to in subsection
174	(2), and, if distributed, copies of additional soliciting
175	material relating to them;
176	11.  The term of any agreement, contract, or understanding
177	made with or proposed to be made with any broker-dealer as to
178	solicitation of securities referred to in subsection (2) for
179	tender, and the amount of any fees, commissions, or other
180	compensation to be paid to broker-dealers with regard thereto;
181	12.  An agreement by the person required to file the
182	statement referred to in subsection (2) that he or she will
183	provide the annual enterprise risk report, if applicable,
184	specified in s. 628.801, for so long as control exists;
185	13.  An acknowledgement by the person required to file the
186	statement referred to in subsection (2) that the person and all
187	subsidiaries within its control in the insurance holding company
188	system will provide information to the commissioner upon request
189	as necessary to evaluate enterprise risk to the insurer; and
190	14.  Such additional information as the commissioner may by
191	rule or regulation prescribe as necessary or appropriate for the
192	protection of policyholders of the insurer or in the public
193	interest.
194	Section 2.  It is the finding of the Legislature that
195	notice of a proposed divestiture in a domestic insurer provided
196	to the Commissioner of Insurance by a controlling person of a
197	domestic insurer who is the acquiring party in the acquisition
198	of a domestic stock insurer be made confidential and exempt from
199	s. 119.07(1), Florida Statutes, and s. 24(a), Art. I of the
200	State Constitution until the conclusion of the transaction,
201	unless the commissioner, in his or her discretion, determines
202	that confidential treatment will interfere with the enforcement
203	of section 628.461, Florida Statutes. It is also the finding of
204	the Legislature that, with respect to a merger or other
205	acquisition of control of a domestic stock insurer where a
206	source of consideration is a loan made in the lender's ordinary
207	course of business, the identity of the lender be held
208	confidential and exempt from s. 119.07(1), Florida Statutes, and
209	s. 24(a), Art. I of the State Constitution if the lender
210	requests confidentiality.
211	Section 3.  This act shall take effect on the same date
212	that HB 1167 or similar legislation takes effect, if such
213	legislation is adopted in the same legislative session or an
214	extension thereof and becomes law.

CODING: Words stricken are deletions; words underlined are additions.