Domestic companies; power to acquire stock of other companies; regulations
Section 193D. A domestic insurance company may retain, invest in or acquire, subject to the provisions of sections sixty-three to sixty-eight, inclusive, the stock, guaranty capital or other share capital of other insurance companies; provided, that if the effect of such retention, investment or acquisition 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.
However, such a company may retain, invest in or acquire, subject to the provisions of sections sixty-three to sixty-eight, the stock, guaranty capital or other share capital of other insurance companies; provided, that it does so solely for investment purposes and does not use the same to bring about the substantial lessening of competition generally in the insurance business, or that it does so in the formation of subsidiary companies for the actual carrying on of their immediate lawful business, or the natural and legitimate branches or extensions thereof, or from owning and holding all or a part of the stock, guaranty capital, or other share capital of such subsidiary companies, and the effect of such formation is not to substantially lessen competition generally in the insurance business.
Whenever the commissioner has reason to believe that there is a violation of this section, he shall serve upon the insurance company concerned a complaint stating his 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 insurance company to show cause why an order should not be made by the commissioner directing said insurance company to cease and desist from such violation. Such insurance company 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 insurance company has violated the provisions of this section, he shall issue and cause to be served upon such company an order reciting the facts found by him, the respects in which such company shall have violated this section and directing such company 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 insurance company to comply with said cease and desist order, he shall report the facts to the attorney general who, if he confirms such facts after investigation, shall at any time after thirty days from receipt of such report of the commissioner, petition the supreme judicial court to enter a decree enjoining the said insurance company from making or issuing any contracts or policies of insurance until such time as it shall have complied with the commissioner’s cease and desist order.
Nothing in this section shall authorize any order, judgment or decree directing any insurance company to divest itself of the stock, guaranty capital or other share capital of another insurance company.