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Contents

Holding Company System Regulatory Act

Act Details

Holding Company System Regulatory Act was, as a bill, a proposal (now, a piece of legislation) introduced on 1973-04-19 in the House of Commons and Senate respectively of the 93 United States Congress by Charles Coles Diggs in relation with: Business and commerce, District of Columbia, Insurance.

Holding Company System Regulatory Act became law (1) in the United States on 1974-08-24

It was referred to the following Committee(s): (2)

House District of Columbia (HSDT)
Senate District of Columbia (SSDT)

Sponsor

Charles Coles Diggs, member of the US congress
Charles Coles Diggs, Democrat, Representative from Michigan, district 13

The proposal had the following cosponsors:

Edward John Gurney, Republican, Senator, from Florida

Act Overview

Number: 7218 (3)
Official Title as Introduced: A bill to improve the laws relating to the regulation of insurance companies in the District of Columbia (4)
Short Title: Holding Company System Regulatory Act
Date First Introduced: 1973-04-19
Sponsor Name: Charles Coles Diggs
Assignment Process: See Committe Assignments (5)
Latest Major Activity/Action: Enacted
Date Enacted (signed, in general (6), by President): 1974-08-24
Type: hr (7)
Main Topic: Insurance
Summary of Holding Company System Regulatory Act: Govtrack. Authored by the Congressional Research Service (CRS) of the Library of Congress.
Primary Source: Congress Website

Text of the Holding Company System Regulatory Act

Holding Company System Regulatory Act – Provides that in the District of Columbia any domestic insurer either by itself or in cooperation with one or more persons may organize to acquire one or more subsidiaries. Provides that such subsidiaries may conduct any kind of business and their authority to do so shall not be limited by reason of the fact that they are subsidiaries of a domestic insurer. Provides that the total amount which a domestic insurer may invest in the common stock preferred stock debt obligations and other securities of such subsidiaries shall not exceed the lesser of: (1) five percent of such insurer's assets; or (2) in the case of a capital stock company fifty percent of the excess of its capital surplus and contingency reserves over the then required statutory minimum capital and surplus or in the case of a mutual company fifty percent of the excess of its surplus and contingency reserves over the then required statutory minimum surplus. Provides that no person other than the issuer shall make a tender offer for or a request or invitation for tender of or enter into any agreement to exchange securities for seek to acquire or acquire in the open market or otherwise any voting security of a domestic insurer if after the consummation thereof such person would directly or indirectly be in control of such insurer. Provides that no person shall enter into an agreement to merge with or otherwise acquire control of a domestic insurer unless at the time any such offer request or invitation is made or any such agreement is entered into or prior to the acquisition of such securities if no offer or agreement is involved such person has filed with the Commissioner of the District of Columbia and has sent to such insurer and such insurer has sent to its shareholders a statement containing the information required by this section and such offer request invitation agreement or acquisition has been approved by the Commissioner. Prescribes the information that must be submitted to the Commissioner as the basis of such approval. Provides that the Commissioner shall approve any merger or other acquisition of control unless after a public hearing thereon he finds that: (1) after the change of control the domestic insurer would not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed; (2) the effect of the merger or other acquisition of control would substantially lessen competition in insurance in the District or tend to create a monopoly therein; (3) the financial condition of any acquiring party is such as might jeopardize the financial stability of the insurer or prejudice the interest of its policyholders or the interests of any remaining securityholders who are unaffiliated with such acquiring party; (4) the terms of the offer request invitation agreement or acquisition are unfair and unreasonable to the securityholders of the insurer; (5) the plans or proposals which the acquiring party has to liquidate the insurer sell its assets or consolidate or merge it with any person or to make any other material change in its business or corporate structure or management are unfair and unreasonable to policyholders of the insurer and not in the public interest; or (6) the competence experience and integrity of those persons who would control the operation of the insurer are such that it would not be in the interest of policyholders of the insurer or of the public to permit the merger or other acquisition of control. Vests jurisdiction with the Superior Court of the District of Columbia over every person not resident domiciled or authorized to do business in the District who files a statement with the Commissioner under this Act and over all actions involving violations of this Act. Provides that every insurer which is authorized to do business in the District and which is a member of an insurance holding company system shall register with the Commissioner. Provides that every insurer subject to such registration shall file a registration statement. Provides that the above provision of registration shall not apply to any insurer information or transaction if and to the extent that the Commissioner by rule regulation or order shall exempt the same therefrom. Provides that material transactions by registered insurers with their affiliates shall be subject to the following standards: (1) the terms shall be fair and reasonable; (2) the books accounts and records of each party shall be so maintained as to clearly and accurately disclose the precise nature and details of the transactions; and (3) the insurer's surplus as regards policy holders following any dividends or distributions to to shareholder affiliates shall be reasonalbe in relation to the insurer's outstanding liabilities and adequate to its financial needs. Authorizes the Commissioner to make a condidential examination of the records books papers or other information in the possession of a registered insurer or its affiliates to ascertain the financial condition or legality of the conduct of such insurer. Authorizes the Commissioner to obtain an injunction in the Superior Court of the District of Columbia against violations of this Act. Provides that any individual who willfully violates this Act may be fined not more than $1000 or if such willful violation involves the deliberate perpetration of a fraud upon the Commissioner imprisoned not more than two years or both. Authorizes the revocation suspension or non-renewal of an insurer's license by the Commissioner whenever it appears to the Commissioner that any person has committed a violation of this Act which makes the continued operation of an insurer contrary to the interests of policyholders or the public.

Act Notes

[Note 1] An Act (like Holding Company System Regulatory Act) or a resolution cannot become a law in the United States until it has been approved (passed) in identical form by both the House of Representatives and the Senate, as well as signed by the President (but see (5)). If the two bodys of the Congress versions of an Act are not identical, one of the bodies might decide to take a further vote to adopt the bill (see more about the Congress process here). An Act may be pass in identical form with or without amendments and with or without conference. (see more about Enrollment).
[Note 2] Proposals are referred to committees for preliminary consideration, then debated, amended, and passed (or rejected) by the full House or Senate. To prevent endless shuttling of bills between the House and Senate, bills like Holding Company System Regulatory Act are referred to joint committees made up of members of both houses.
[Note 3] For more information regarding this legislative proposal, go to THOMAS, select “Bill Number,” search on (Holding Company System Regulatory Act)
[Note 4] A bill to improve the laws relating to the regulation of insurance companies in the District of Columbia. The current official title of a bill is always present, assigned at introduction (for example, in this case, on 1973-04-19) and can be revised any time. This type of titles are sentences.
[Note 5] The Act is referred to the appropriate committee by the Speaker of any of the two Houses. Bills are placed on the calendar of the committee to which they have been assigned. See Assignment Process.
[Note 6] Regarding exceptions to President´s approval, a bill that is not signed (returned unsigned) by the President can still become law if at lest two thirds of each of the two bodys of the Congress votes to pass it, which is an infrequent case. See also Presidential Veto.
[Note 7] Legislative Proposal types can be: hr, hres, hjres, hconres, s, sres, sjres, sconres. A bill originating in the Senate is designated by the letter “S”, and a bill originating from the House of Representatives begins with “H.R.”, followed, in both cases, by its individual number which it retains throughout all its parliamentary process.
[Note 8] For information regarding related bill/s to Holding Company System Regulatory Act, go to THOMAS.

Analysis

No analysis (criticism, advocacy, etc.) about Holding Company System Regulatory Act submitted yet.

Business and commerce
District of Columbia
Insurance

Holding Company System Regulatory Act

Holding Company System Regulatory Act