Form A Filings

MCL 500.1311 required any person seeking to acquire control of a Michigan domestic insurer to obtain approval from the director. The director has prescribed any person seeking approval to file a Form A - Statement Regarding the Acquisition of Control of or Merger with a Domestic Insurer. Control is defined in MCL 500.115, and is presumed to exist if any person, by formal or informal arrangement, device, or understanding, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing 10% or more of the voting securities of any other person or for a mutual insurer owns 10% or more of the insurer's surplus through surplus notes, guarantee fund certificates or other evidence of indebtedness issued by the insurer. The table below shows the filing and disposition of recent Form A Statements.

Standards: The director reviews each Form A Statement in accordance with MCL 500.1315, which requires the director to approve the merger or acquisition unless the director determines on the basis of information furnished that one or more the following exists:

(a) After the change of control the domestic insurer referred to in section 1311 would not be able to satisfy the requirements for the issuance of a certificate of authority to write the types of insurance for which it is presently authorized.

(b) The effect of the merger or other acquisition of control would be substantially to lessen competition in insurance in this state or tend to create a monopoly in this state.

(c) 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 the acquiring party.

(d) The terms of the offer, request, invitation, agreement, or acquisition referred to in section 1311 are unfair and unreasonable to the insurer's policyholders or securityholders.

(e) The plans or proposals that the acquiring party has to liquidate the insurer, sell its assets, 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 the insurer's policyholders, and not in the public interest.

(f) 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 the insurer's policyholders or the general public to permit the merger or other acquisition of control.