Utah Code 31A-16-111. Required sale of improperly acquired stock — Penalties
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(1) If the commissioner finds that the acquiring person has not substantially complied with the requirements of this chapter in acquiring control of a domestic insurer, the commissioner may require the acquiring person to sell the acquiring person’s stock of the domestic insurer in the manner specified in Subsection (2).
Terms Used In Utah Code 31A-16-111
- Conviction: A judgement of guilt against a criminal defendant.
- Director: means a member of the board of directors of a corporation. See Utah Code 31A-1-301
- Domestic insurer: means an insurer organized under the laws of this state. See Utah Code 31A-1-301
- Employee: means :(57)(a) an individual employed by an employer; or(57)(b) an individual who meets the requirements of Subsection (55)(b). See Utah Code 31A-1-301
- Individual: means a natural person. See Utah Code 31A-1-301
- Insurance: includes :
(96)(b)(i) a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;(96)(b)(ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and(96)(b)(iii) a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Person: includes :
(146)(a) an individual;(146)(b) a partnership;(146)(c) a corporation;(146)(d) an incorporated or unincorporated association;(146)(e) a joint stock company;(146)(f) a trust;(146)(g) a limited liability company;(146)(h) a reciprocal;(146)(i) a syndicate; or(146)(j) another similar entity or combination of entities acting in concert. See Utah Code 31A-1-301- Sell: means to exchange a contract of insurance:
(179)(a) by any means;(179)(b) for money or its equivalent; and(179)(c) on behalf of an insurance company. See Utah Code 31A-1-301(2)(2)(a) The commissioner shall effect the sale required by Subsection (1) in the manner which, under the particular circumstances, appears most likely to result in the payment of the full market value for the stock by persons who have the collective competence, experience, financial resources, and integrity to obtain approval under Subsection 31A-16-103(8).(2)(b) Sales made under this section are subject to approval by a court with jurisdiction under Title 78A, Judiciary and Judicial Administration, which court has the authority to effect the terms of the sale.(3) The proceeds from sales made under this section shall be distributed first to the person required by this section to sell the stock, but only up to the amount originally paid by the person for the securities. Additional sale proceeds shall be paid to the General Fund.(4) The person required to sell and persons related to or affiliated with the seller may not purchase the stock at the sale conducted under this section.(5)(5)(a) A director or officer of an insurance holding company system violates this chapter if the director or officer knowingly:(5)(a)(i) participates in or assents to a transaction or investment that:(5)(a)(i)(A) has not been properly reported or submitted pursuant to:(5)(a)(i)(A)(I) Subsections 31A-16-105(1) and (2); or(5)(a)(i)(A)(II) Subsection 31A-16-106(1)(b); or(5)(a)(i)(B) otherwise violates this chapter; or(5)(a)(ii) permits any of the officers or agents of the insurer to engage in a transaction or investment described in Subsection (5)(a)(i).(5)(b) A director or officer in violation of Subsection (5)(a) shall pay, in the director’s or officer’s individual capacity, a civil penalty of not more than $20,000 per violation:(5)(b)(i) upon a finding by the commissioner of a violation; and(5)(b)(ii) after notice and hearing before the commissioner.(5)(c) In determining the amount of the civil penalty under Subsection (5)(b), the commissioner shall take into account:(5)(c)(i) the appropriateness of the penalty with respect to the gravity of the violation;(5)(c)(ii) the history of previous violations; and(5)(c)(iii) any other matters that justice requires.(6)(6)(a) When it appears to the commissioner that any insurer or any director, officer, employee, or agent of the insurer, has committed a willful violation of this chapter, the commissioner may refer the violation to the appropriate prosecutor.(6)(b)(6)(b)(i) An insurer that willfully violates this chapter may be fined not more than $20,000.(6)(b)(ii) Any individual who willfully violates this chapter is guilty of a third degree felony, and upon conviction may be:(6)(b)(ii)(A) fined in that person’s individual capacity not more than $5,000;(6)(b)(ii)(B) imprisoned; or(6)(b)(ii)(C) both fined and imprisoned.(7) This section does not limit the other sanctions applicable to violations of this title under Section 31A-2-308.