CODE OF VIRGINIA

DEFINITIONS (§ 38.2-1322)

As used in this article:”Acquiring person” means any person by whom
or on whose behalf acquisition of control of any domestic insurer is to be
effected.”Affiliate” of a specific person or a person
“affiliated” with a specific person means a person that directly or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with the person specified.”Control,” including
the terms “controlling,” “controlled by” and
“under common control with,” means direct or indirect possession of
the power to direct or cause the direction of the management and policies of a
person, through (i) the ownership of voting securities, (ii) by contract other
than a commercial contract for goods or nonmanagement services, or (iii)
otherwise, unless the power is the result of an official position with or
corporate office held by the person. Control shall be presumed to exist if any
person directly or indirectly owns, controls, holds with the power to vote, or
holds proxies representing collectively 10 percent or more of the voting
securities of any other person. This presumption may be rebutted by a showing
made in the manner provided by subsection K of § 38.2-1329 that control does
not exist. After giving all interested persons notice and opportunity to be
heard and making specific findings to support its determination, the Commission
may determine that control exists, notwithstanding the absence of a presumption
to that effect.”Enterprise risk” means any activity, circumstance,
event, or series of events involving one or more affiliates of an insurer that,
if not remedied promptly, is likely to have a material adverse effect upon the
financial condition or liquidity of the insurer or its insurance holding company
system as a whole, including, but not limited to, anything that would cause the
insurer’s risk-based capital to fall into company action level as set
forth in § 38.2-5503 or would cause the insurer to be in hazardous financial
condition pursuant to 14 VAC 5-290-30 and 14 VAC 5-290-40 of the Virginia
Administrative Code.”Insurance holding company system” means two or
more affiliated persons, one or more of which is an
insurer.”Insurer” means an insurance company as defined in §
38.2-100.”Material transaction” means (i) any sale, purchase,
exchange, loan or extension of credit, or investment; (ii) any dividend or
distribution; (iii) any reinsurance treaty or risk-sharing arrangement; (iv) any
management contract, service contract or cost-sharing arrangement; (v) any
merger with or acquisition of control of any corporation; or (vi) any other
transaction or agreement that the Commission by order, rule or regulation
determines to be material. Any series of transactions occurring within a
12-month period that are sufficiently similar in nature as to be reasonably
construed as a single transaction and that in the aggregate exceed any minimum
limits shall be deemed a material transaction.”NAIC” means the
National Association of Insurance Commissioners.”SEC” means the U.S.
Securities and Exchange Commission.”Subsidiary” of a specified
person means an affiliate directly or indirectly controlled by that person
through one or more intermediaries.”Voting security” means any
security that enables the owner to vote for the election of directors.
“Voting security” includes any security convertible into or
evidencing a right to acquire a voting security.

HISTORY: 1973, c. 505, § 38.1-178.1; 1977, c. 414, § 38.1-178.1:2; 1986, c.
562; 1992, c. 588; 1993, c. 158; 1998, c. 42; 2014, c. 309.