Section 66C: Life companies; investment in stock of insurance companies
Section 66C. In addition to stock investments in the stock of a life company authorized by section sixty-six or other provisions of this chapter, a domestic life company may, subject to the provisions of section one hundred and ninety-three D, invest in, or otherwise acquire, under the conditions set forth in this section, the capital stock including voting trust certificates, certificates of deposit, interim receipts and other similar instruments representing such stock, of one or more solvent insurance companies.
Except to the extent provided in the last sentence of this paragraph, no investment pursuant to this section shall be retained by a domestic life company unless at all times after one year from the date of its acquisition such domestic life company holds forty per cent of the total issued and outstanding capital stock having voting powers of such insurance companies; and no such investments in excess of ten per cent of the total issued and outstanding capital stock of such insurance companies shall be acquired unless a notice of intention of such proposed investment shall have been filed with the commissioner not less than ninety days in advance of such proposed investment; provided that the commissioner may at any time after such filing disapprove such investment and order its disposition if he finds that it does not meet the requirements of this section and chapter. The commissioner may authorize acquisition or retention of less than forty per cent of the total issued and outstanding capital stock having voting powers in such insurance companies if he finds that under the law of the domicile of such insurance companies acquisition or retention of such forty per cent interest is impracticable or unfeasible or that acquisition or retention of less than such a forty per cent interest will not be prejudicial to the interests of the domestic life insurance company's policyholders or members or of the people of the commonwealth.
For the purposes of this section, any insurance company the capital stock of which is acquired and retained by a domestic life insurance company under this section shall be deemed a related stock company of such domestic life insurance company.
At no time shall a domestic life insurance company make an investment in any such insurance companies pursuant to this section which will bring the aggregate cost of its total of such investments to an amount in excess of the lesser of (1) the greater of thirty-five per cent of such company's surplus to policyholders or fifty per cent of its surplus over and above its liabilities and capital, or (2) the sum of (a) four per cent of its first two hundred and fifty million dollars of admitted assets, (b) two per cent of its next two hundred and fifty million dollars of admitted assets and (c) one per cent of its admitted assets in excess of five hundred million dollars; except that a domestic life insurance company may, upon a finding by the commissioner that such an investment will be of benefit to policyholders and not lead to a lessening of competition within the insurance business, make an investment in any such insurance companies pursuant to this section in excess of the foregoing limits provided that at the time made any such investment shall not bring the aggregate cost of such domestic life insurance company's total of such investments to an amount in excess of five per cent of the admitted assets of such domestic life insurance company. For the purposes of this section, surplus, liabilities, capital and admitted assets shall be ascertained as of the December thirty-first next preceding such investment.
For the purposes of this section, total investment by a domestic life insurance company in related stock companies shall include said domestic life company's loans, advances, contributions to such related stock companies, its holdings of bonds, notes and stocks of such related stock companies and interests therein of any other related stock company or other life company in which such domestic life insurance company holds more than a ten per cent interest, or of any subsidiary of such other life company.
The name of any such insurance company which is a related stock company of a domestic life insurance company shall not be such as to mislead or deceive the public.
Any related stock company acquired by a domestic life insurance company pursuant to this section shall make no investment in or loan or advance to the parent corporation or to any other related stock company of the parent corporation; and, except with the approval of the commissioner as not prejudicial to the interest of the policyholders or members of such insurance companies or of the people of the commonwealth, none of such insurance companies shall make transfers to any other such insurance companies of any of its assets, other than transfers in connection with reasonable fees and expenses, interest, premiums and annuity considerations, debt repayments and dividends.
No related stock company acquired by a domestic life insurance company pursuant to this section shall make any investment in (1) a corporation having more than twenty per cent of its assets invested in insurance company stocks, (2) a corporation, other than an insurance corporation, if a majority of the stock having voting powers is owned directly or indirectly by or for the benefit of one or more officers or directors of such related stock company, or (3) any corporation in which such investment is found by the commissioner to be against public policy.
In addition to the powers expressly given by this section, the commissioner shall have the power to promulgate, from time to time, such regulations, not inconsistent with the provisions of this chapter, as may be appropriate to carry out the provisions of this section and, insofar as applicable to this section, other provisions of this chapter.