A. Except as otherwise provided in this chapter, Article 11 (§ 13.1-894 et seq.) of Chapter 10 of Title 13.1 shall apply to mergers involving corporations licensed under this chapter.
B. Before any joint agreement for the merger of a corporation licensed under this chapter is submitted to the members, it shall first be submitted to and approved by the Commission. The Commission shall approve the agreement, unless, after giving notice and opportunity to be heard, it determines that:
1. After the merger, the new or surviving corporation would not be able to satisfy the requirements of this chapter for the issuance of a license;
2. The effect of the merger would lessen competition substantially or tend to create a monopoly in insurance, prepaid hospital, medical and surgical services plans, or health care benefit plans in this Commonwealth;
3. The financial condition of any party to the merger might jeopardize the financial stability of the new or surviving corporation, or prejudice the interest of the subscribers;
4. Any plans or proposals of the new or surviving corporation to liquidate the new or surviving corporation, sell its assets or merge it with any person, or to make any other material change in its business or corporate structure or management, are unfair and unreasonable to the subscribers and not in the public interest;
5. The competence, experience, and integrity of those persons who would control the operation of the new or surviving corporation are such that it would not be in the interest of the subscribers and of the public to permit the merger; or
6. After the change of control, the new or surviving corporation’s surplus to subscribers would not be reasonable in relation to its outstanding liabilities or adequate to its financial needs.
C. The provisions of subsection B notwithstanding, the Commission has the authority to merge two nonstock corporations licensed under this chapter where it finds that (i) one of the corporations is insolvent or is in such condition that its further transaction of business in this Commonwealth is hazardous to subscribers and the public, (ii) that the merger of such nonstock corporation into another nonstock corporation licensed under this chapter is desirable for the protection of its subscribers, and that such merger of such nonstock corporation is in the public interest, and (iii) that an emergency exists, and if the board of directors of the insolvent or financially hazardous nonstock corporation to be merged approves a plan of merger of such nonstock corporation into another nonstock corporation licensed under this chapter, compliance with the requirements of § 13.1-895 shall be dispensed with as to such nonstock corporation and the approval by the Commission of such plan of merger shall be the equivalent of approval of two-thirds of the members for all purposes of Article 11 (§ 13.1-894 et seq.) of Chapter 10 of Title 13.1. The Commission shall provide that prompt notice of its findings, and plan of merger be sent to the members of record of such corporation for the purpose of providing such members an opportunity to challenge the findings of the Commission and the plan of merger. The Commission’s findings and plan of merger shall become final if a hearing before the Commission is not requested by any member in a written request delivered to the Commission within fifteen days after the notice specified herein is sent.
History
1986, c. 562.
