SENATE SUBSTITUTE NO. 1
TO SENATE BILL NO. 438
AN ACT TO AMEND CHAPTER 13, TITLE 18, OF DELAWARE CODE RELATING TO INVESTMENTS OF DOMESTIC INSURERS AND REVISING THE OWNERSHIP REQUIREMENTS AS TO THEIR INVESTMENTS IN INSURANCE SUBSIDIARIES AND OTHER BUSINESS CORPORATIONS.
Be it enacted by the General Assembly of the State of Delaware:
Section 1. Amend §1305 (2) of Title 18, Delaware Code by striking said subsection in its entirety and substitute in lieu thereof a new subsection § 1305 (2) to read as follows:
"(2) Voting Stock. An insurer may invest in and hold at any time not more than 50% of the outstanding voting stock of any corporation except as to voting rights to preferred stock during periods of defaults of dividends. This restriction shall not apply to stock of a subsidiary of the insurer acquired under § 1313 of this Chapter, or to controlling stock of an insurer acquired under §1312 (b) of this Chapter. The aggregate value of all stock acquired and held under this section shall not exceed 20% of the insurer's assets."
Section 2. Amend §1313 of Title 18, Delaware Code, by striking said section in its entirety and substitute in lieu thereof a new §1313 to read as follows:
"§1313. Stock of Subsidiaries.
An insurer may invest in the stock of subsidiary insurance corporations formed or acquired by it, or, in addition to the right to own stock in other corporations given insurers in § 1305 (2), it may also invest in not less than a majority of the voting stock of a business corporation formed under the laws of this or another State or a foreign nation and the activities of which corporation are primarily supplementary and complimentary to the convenient operation of the insurer's business or to the administration of its affairs. As used in this Title, a subsidiary insurance corporation shall include, in addition to those such corporations where the insurer owns a majority of their stock, those corporations formed or acquired by an insurer where it owns less than a majority of such corporation's voting stock due to the laws of a foreign nation which require the insurer to own less than a majority of the voting stock of such subsidiary insurance corporation if it is to operate in that nation. All of the insurer's investments under this section, together with its investments in insurance stocks under §1312 (b) of this Chapter, shall not at any time exceed the amount of the investing insurer's surplus, if a life insurer, or its policyholders' surplus (as defined in §511 (2) of this Chapter) if other than a life insurer."
Approved April 5, 1976