PURPOSE: This rule permits the director to take into account the effect on the plan of conversion in the event that any person or group of persons seeks to acquire a controlling interest in the capital stock of the converted holding company for a period of years after the effective date of the conversion as determined by the director. It also limits the ability of management to acquire a controlling interest in the capital stock of the converted holding company within two years after the effective date of the conversion.

1. (1) After the effective date of the conversion, for a period of time not to exceed five (5) years to be determined by the director, if any person shall acquire or offer to acquire a direct or indirect interest in the converted holding company or the reorganized insurer in a transaction requiring the director’s prior approval pursuant to section 382.040, RSMo or 375.355, RSMo, the director, in applying the relevant statutory criteria, shall consider—

   1. (A) Whether the acquisition will frustrate the plan of conversion;
   2. (B) Whether the acquisition is in the interest of policyholders of the reorganized insurer; and
   3. (C) Whether the board of directors of the converted holding company or its parent has approved the acquisition.
2. (2) For a period of six (6) months after the effective date of the conversion, no officer, director or employee of the converted holding company or of any affiliate shall be granted as compensation any stock, stock options, or similar interests in the converted holding company or the reorganized insurer.
3. (3) For a period of two (2) years after the effective date of the conversion, the aggregate percentage of outstanding stock, including stock options, of the converted holding company or the reorganized insurer held by officers, directors and employees of the converted holding company or any affiliate may not exceed ten percent (10%).

AUTHORITY: section 374.045, RSMo Supp. 1998.* Original rule filed March 1, 1999, effective Aug. 30, 1999.

*Original authority 374.045, RSMo 1967, amended 1993, 1995.