Florida Senate - 2011                                    SB 1800
       
       
       
       By Senator Ring
       
       
       
       
       32-02083-11                                           20111800__
    1                        A bill to be entitled                      
    2         An act relating to public records; amending s.
    3         628.461, F.S.; providing an exemption from public
    4         records requirements for notice of a proposed
    5         divestiture in a domestic insurer provided to the
    6         Commissioner of Insurance pursuant to the acquisition
    7         of a domestic stock insurer; specifying duration of
    8         the exemption; providing an exemption from public
    9         records requirements for the identity of a lender
   10         pursuant to a merger or other acquisition of control
   11         of a domestic stock insurer where a source of
   12         consideration is a loan made in the lender’s ordinary
   13         course of business, upon request of the lender;
   14         providing for future legislative review and repeal of
   15         the exemptions; providing a statement of public
   16         necessity; providing a conditional effective date.
   17  
   18  Be It Enacted by the Legislature of the State of Florida:
   19  
   20         Section 1. Paragraph (a) of subsection (2) and paragraph
   21  (a) of subsection (3) of section 628.461, Florida Statutes, as
   22  amended by SB ___, 2011 Regular Session, are amended to read:
   23         628.461 Acquisition of controlling stock.—
   24         (2) FILING REQUIREMENTS; PUBLIC-RECORDS EXEMPTION.—A person
   25  may not, individually or in conjunction with any affiliated
   26  person of such person, acquire directly or indirectly, conclude
   27  a tender offer or exchange offer for, enter into any agreement
   28  to exchange securities for, or otherwise finally acquire 10
   29  percent or more of the outstanding voting securities of a
   30  domestic stock insurer or of a controlling company, unless at
   31  the time the offer, request, or invitation is made or the
   32  agreement is entered into, or prior to the acquisition of the
   33  securities if no offer or agreement is involved, such person has
   34  filed with the commissioner and has sent to the insurer, a
   35  statement containing the information required by this section
   36  and the offer, request, invitation, agreement, or acquisition
   37  has been approved by the commissioner in the manner prescribed
   38  in this section.
   39         (a)1. For purposes of this section, any controlling person
   40  of a domestic insurer seeking to divest its controlling interest
   41  in the domestic insurer in any manner shall file with the
   42  commissioner, with a copy provided to the insurer, notice of its
   43  proposed divestiture at least 30 days prior to the cessation of
   44  control. The commissioner shall determine those instances in
   45  which the party or parties seeking to divest a controlling
   46  interest in an insurer will be required to file for and obtain
   47  approval of the transaction.
   48         2. Notice of a proposed divestiture in a domestic insurer
   49  provided to the commissioner by a controlling person of a
   50  domestic insurer under subparagraph 1. is confidential and
   51  exempt from s. 119.07(1) and s. 24(a), Art. I of the State
   52  Constitution. Information contained in the notice remains
   53  confidential until the conclusion of the transaction unless the
   54  commissioner, in his or her discretion, determines that
   55  confidential treatment will interfere with the enforcement of
   56  this section.
   57         3. Subparagraph 2. is subject to the Open Government Sunset
   58  Review Act in accordance with s. 119.15 and shall stand repealed
   59  on October 2, 2016, unless reviewed and saved from repeal
   60  through reenactment by the Legislature.
   61         (3) CONTENT OF STATEMENT.—
   62         (a) The statement to be filed with the office and furnished
   63  to the insurer and controlling company shall be made under oath
   64  and contain the following information and any additional
   65  information as the office deems necessary to determine the
   66  character, experience, ability, and other qualifications of the
   67  person or affiliated person of such person for the protection of
   68  the policyholders and shareholders of the insurer and the
   69  public:
   70         1. The name and address of each person by whom or on whose
   71  behalf the merger or other acquisition of control referred to in
   72  subsection (2) is to be effected, hereinafter referred to as the
   73  “acquiring party,” the background information on each natural
   74  person by whom, or on whose behalf, the acquisition is to be
   75  made, and, if the acquisition is to be made by or on behalf of a
   76  corporation, association, or trust, the identity of, and the
   77  background information specified in this section on, each
   78  director, officer, trustee, or other natural person performing
   79  duties similar to those of a director, officer, or trustee for
   80  the corporation, association, or trust or any person who
   81  controls, either directly or indirectly, the corporation,
   82  association, or trust, and:
   83         a. If the person is an individual, his or her principal
   84  occupation and all offices and positions held during the past 10
   85  years, and any conviction of crimes other than minor traffic
   86  violations during the past 10 years;
   87         b. Whether, during such 10-year period, the person has been
   88  the subject of any proceeding for the revocation of any license
   89  and, if so, the nature of the proceeding and the disposition of
   90  the proceeding.
   91         c. Whether, during the 10-year period, the person has been
   92  the subject of any proceeding under the Federal Bankruptcy Code
   93  or whether, during the 10-year period, any corporation,
   94  partnership, firm, trust, or association in which the person was
   95  a director, officer, trustee, partner, or other official has
   96  been subject to any such proceeding, either during the time in
   97  which the person was a director, officer, trustee, partner, or
   98  other official or within 12 months thereafter.
   99         d. Whether, during the 10-year period, the person has been
  100  enjoined, either temporarily or permanently, by a court of
  101  competent jurisdiction from violating any federal or state law
  102  regulating the business of insurance, securities, or banking, or
  103  from carrying out any particular practice or practices in the
  104  course of the business of insurance, securities, or banking,
  105  together with details as to any such event.
  106         e. If the person is not an individual, a report of the
  107  nature of its business operations during the past 5 years or for
  108  the period of time that the person and any predecessors have
  109  been in existence, whichever is less, an informative description
  110  of the business intended to be conducted by the person and the
  111  person’s subsidiaries, and a list of all individuals who are or
  112  who have been selected to become directors, trustees, or
  113  executive officers of the person, or who perform or will perform
  114  functions appropriate to such positions. The list must include
  115  for each individual the information required under subparagraph
  116  (a)1.;
  117         2.a. The source, nature, and amount of the consideration
  118  used or to be used in effecting the merger or other acquisition
  119  of control, a description of any transaction where funds were or
  120  are to be obtained for any such purpose, including any pledge of
  121  the insurer’s stock or the stock of any of its subsidiaries or
  122  controlling affiliates, and the identity of persons furnishing
  123  consideration.
  124         b. Where a source of consideration is a loan made in the
  125  lender’s ordinary course of business, the identity of the lender
  126  is confidential and exempt from s. 119.07(1) and s. 24(a), Art.
  127  I of the State Constitution, if the lender so requests.
  128         c. Sub-subparagraph b. is subject to the Open Government
  129  Sunset Review Act in accordance with s. 119.15 and shall stand
  130  repealed on October 2, 2016, unless reviewed and saved from
  131  repeal through reenactment by the Legislature.
  132         3. Fully audited financial information as to the earnings
  133  and financial condition of each acquiring party for the
  134  preceding 5 fiscal years of each acquiring party, or for the
  135  period the acquiring party and any predecessors have been in
  136  existence, whichever is less, and similar unaudited information
  137  as of a date not earlier than 90 days prior to the filing of the
  138  statement;
  139         4. Any plans or proposals which each acquiring party may
  140  have to liquidate the insurer, to sell its assets or merge or
  141  consolidate it with any person, or to make any other material
  142  change in its business or corporate structure or management;
  143         5. The number and class of shares of any security referred
  144  to in subsection (2) that each acquiring party proposes to
  145  acquire, the terms of the offer, request, invitation, agreement
  146  or acquisition referred to in subsection (2), and a statement as
  147  to the method used to determine the fairness of the proposal;
  148         6. The amount of each class of any security referred to in
  149  subsection (2) which is beneficially owned or concerning which
  150  there is a right to acquire beneficial ownership by each
  151  acquiring party;
  152         7. A full description of any contracts, arrangement, or
  153  understandings with respect to any security referred to in
  154  subsection (2) in which any acquiring party is involved,
  155  including, but not limited to, transfer of any of the
  156  securities, joint ventures, loan or option arrangements, puts or
  157  calls, guarantees of loans, guarantees against loss or
  158  guarantees of profits, division of losses or profits, or the
  159  giving or withholding of proxies. The description must identify
  160  the persons with whom the contracts, arrangements, or
  161  understandings have been entered into;
  162         8. A description of the purchase of any security referred
  163  to in subsection (2) during the 12 calendar months preceding the
  164  filing of the statement by any acquiring party, including the
  165  dates of purchase, names of the purchasers, and consideration
  166  paid or agreed to be paid;
  167         9. A description of any recommendations to purchase any
  168  security referred to in subsection (2), made during the 12
  169  calendar months preceding the filing of the statement by any
  170  acquiring party or by anyone based upon interviews or at the
  171  suggestion of the acquiring party;
  172         10. Copies of all tender offers for, requests or
  173  invitations for tenders of, exchange offers for, and agreements
  174  to acquire or exchange any securities referred to in subsection
  175  (2), and, if distributed, copies of additional soliciting
  176  material relating to them;
  177         11. The term of any agreement, contract, or understanding
  178  made with or proposed to be made with any broker-dealer as to
  179  solicitation of securities referred to in subsection (2) for
  180  tender, and the amount of any fees, commissions, or other
  181  compensation to be paid to broker-dealers with regard thereto;
  182         12. An agreement by the person required to file the
  183  statement referred to in subsection (2) that he or she will
  184  provide the annual enterprise risk report, if applicable,
  185  specified in s. 628.801, for so long as control exists;
  186         13. An acknowledgement by the person required to file the
  187  statement referred to in subsection (2) that the person and all
  188  subsidiaries within its control in the insurance holding company
  189  system will provide information to the commissioner upon request
  190  as necessary to evaluate enterprise risk to the insurer; and
  191         14. Such additional information as the commissioner may by
  192  rule or regulation prescribe as necessary or appropriate for the
  193  protection of policyholders of the insurer or in the public
  194  interest.
  195         Section 2. It is the finding of the Legislature that notice
  196  of a proposed divestiture in a domestic insurer provided to the
  197  Commissioner of Insurance by a controlling person of a domestic
  198  insurer who is the acquiring party in the acquisition of a
  199  domestic stock insurer be made confidential and exempt from s.
  200  119.07(1), Florida Statutes, and s. 24(a), Article I of the
  201  State Constitution until the conclusion of the transaction,
  202  unless the commissioner, in his or her discretion, determines
  203  that confidential treatment will interfere with the enforcement
  204  of s. 628.461, Florida Statutes. It is also the finding of the
  205  Legislature that, with respect to a merger or other acquisition
  206  of control of a domestic stock insurer where a source of
  207  consideration is a loan made in the lender’s ordinary course of
  208  business, the identity of the lender be held confidential and
  209  exempt from s. 119.07(1), Florida Statutes, and s. 24(a),
  210  Article I of the State Constitution if the lender requests
  211  confidentiality.
  212         Section 3. This act shall take effect on the same date that
  213  SB ___ or similar legislation takes effect, if such legislation
  214  is adopted in the same legislative session or an extension
  215  thereof and becomes law.