Mich. Admin. Code R. 500.529 – Exemption of transactions pursuant to mergers or consolidations. | Midpage
Rule 500.529
Mich. Admin. Code R. 500.529
Exemption of transactions pursuant to mergers or consolidations.
(By authority conferred on the commissioner of insurance by sections 210 and 4424(6) of Act No. 218 of the Public Acts of 1956, as amended, being SS500.210 and 500.4424(6) of the Michigan Compiled Laws)Insurance
(1) The following transactions are exempt from the provisions of section 5283 of the act as not comprehended within the purpose of the section:
(a) The acquisition of a security of an insurer, pursuant to a merger or consolidation, in exchange for a security of a company which, prior to the merger or consolidation, owned 85% or more of the equity securities of all other companies involved in the merger or consolidation except, in the case of consolidation, the resulting company.
(b) The disposition of a security, pursuant to a merger or consolidation of an insurer which, prior to the merger or consolidation, owned 85% or more of the equity securities of all other companies involved in the merger or consolidation except, in the case of consolidation, the resulting company.
(c) The acquisition of a security of an insurer, pursuant to a merger or consolidation, in exchange for a security of a company which, prior to the merger or consolidation, held over 85% of the combined assets of all the companies undergoing merger or consolidation, computed according to their book values prior to the merger or consolidation, as determined by reference to their most recent available financial statements for a 12- month period prior to the merger or consolidation.
(d) The disposition of a security, pursuant to a merger or consolidation, of an insurer which, prior to the merger or consolidation, held over 85% of the combined assets of all the companies undergoing merger or consolidation, computed according to their book values prior to merger or consolidation, as determined by reference to their most recent available financial statements for a 12-month period prior to the merger or consolidation.
(2) A merger within the meaning of this rule includes the sale or purchase of substantially all the assets of 1 insurer by another in exchange for stock which is then distributed to the security holders of the insurer which sold its assets.
(3) Notwithstanding the provisions of subrules (1) and (2), if an officer, director or stockholder makes any purchase, other than a purchase exempted by this rule, of a security in any company involved in the merger or consolidation and any sale, other than a sale exempted by this rule, of a security in any other company involved in the merger or consolidation within any period of less than 6 months during which the merger or consolidation took place, the exemption provided by this rule is unavailable to the officer, director or stockholder to the extent of the purchase and sale.