Section 193C: Domestic companies; interlocking directorates; regulations; procedure
Section 193C. Any domestic insurance company may have as a director a person who is also a director of another insurance company, which may be an alien, foreign or domestic company, provided, however, that if the effect thereof is to substantially lessen competition generally in the insurance business or tends to create a monopoly therein, it shall be deemed a violation of this chapter.
Whenever the commissioner has reason to believe that there is a violation of this section, he shall serve upon the director concerned a complaint stating the commissioner's charge in that respect, to which complaint shall be attached, or in which there shall be contained, a notice of hearing, specifying the time and place, not less than thirty days after the service thereof, and requiring such director to show cause why an order should not be made by the commissioner directing such director to cease and desist from such violation. Such director may at the time and place so fixed show cause why such an order should not be entered. Nothing contained in this section shall require the observance at such hearing of formal rules of pleading or evidence, and the evidence taken at such hearing shall be reduced to writing and made a part of the record thereof. If, upon such hearing, the commissioner shall find that such director has violated this section, he shall issue and cause to be served upon such director an order reciting the facts found by him, the respects in which such director shall have violated this section and directing such director to cease and desist from such violation. Any finding and order of the commissioner shall be subject to review, which shall be on the basis of the record of the proceedings before the commissioner and shall not be limited to questions of law, by appeal to the supreme judicial court within twenty days after the receipt of such order at the instance of any party in interest. The filing of such appeal shall act as a stay of any such order unless the court shall determine otherwise. The court may modify, affirm or reverse the order of the commissioner in whole or in part.
Whenever, after the time for appeal from any such cease and desist order of the commissioner has expired, or, if an appeal has been taken, after such order has been affirmed, the commissioner shall have reason to believe that there has been a failure by any such director to comply with such cease and desist order, he shall report the facts to the attorney general who, if he confirms such facts after investigation, shall petition the supreme judicial court to enter a decree ordering the said director to comply with the cease and desist order forthwith.
The effect of any person serving as director for two or more insurance companies shall prima facie not be in violation of this section.