Rule 120-2-23-.23 - Exemption for Passive Investors1) Institutional investors, their sponsored investment funds, subsidiaries and affiliates who meet the following criteria will not be presumed to control a domestic insurer under O.C.G.A. § 33-13-1(3), and therefore, the Commissioner may exempt such investors, in accordance with O.C.G.A. § 33-13-3(e), from Form A filing requirements and being included in Form B requirements in accordance with O.C.G.A. § 33-13-4(j) in connection with such passive investments. Investors may seek this exemption are those who: a) Only make passive investment directly or indirectly in publicly traded voting securities of insurance holding companies with a domestic insurer;b) Whose investments directly or indirectly equal or exceed 10% of the voting securities of such companies; andc) Whose passive investment in such companies are not entered into for the purpose of changing or influencing the control of a domestic insurer.2) The Commissioner may grant the exemption in accordance with O.C.G.A. § 33-13-3(e) and O.C.G.A. § 33-13-4(j) if an applicant meets the following conditions: a) The applicant is a "Qualifying Investor" i) A "Qualifying Investor" is an investor that directly or indirectly purchases voting securities of publicly-traded insurance holding companies held in an investment fund or in order to track a specified reference index; and ii) Files, or would be eligible to file, a Schedule 13G pursuant to 17 CFR 240.13d-1(b) of the Regulations of the Securities and Exchange Commission with respect to the publicly traded securities of the relevant insurance holding company held by such investor.b) On an annual basis, each Qualifying Investor will certify to the Commissioner that: i) It does not seek to exercise "control" within the meaning of O.C.G.A. § 33-13-1(3) Over any applicable domestic insurer or its holding company; and ii) As evidence of its passive intent it has filed or would be eligible to file a Schedule 13G under the Exchange Act with respect to the publicly traded securities of the relevant insurance holding company. Provided that: (1) Qualifying Investors who certify to the Commissioner their mere eligibility to file a Schedule 13G must make a certification to the Commissioner identical to that found in Schedule 13G Item 10 (a).iii) The Qualifying Investor shall submit to the Department annual reports of its holdings in insurance holding companies with domestic insurer subsidiaries. iv) The Qualifying Investor shall commit to refrain from seeking or accepting representation on the board of directors of any insurance holding companies with domestic insurer subsidiaries in which it invests. Similarly, the Qualifying Investor would commit to refrain from proposing a director or slate of directors in opposition to a nominee proposed by the management or board of directors of such companies.3) Qualifying Investors whose investments exceed 20% of the total voting securities of such relevant companies or who are no longer eligible to file a Schedule 13G and instead must file a 13D pursuant to 17 CFR 240.13d-1(a) of the Regulations of the Securities and Exchange Commission with respect to the publicly traded voting securities of the relevant insurance holding company held by such investor, must notify the Commissioner within 10 of the date the Qualifying Investor became aware of such a change.4) Any officer, director, representative, or employee of a Qualifying Investor or insurance holding company system who willfully and knowingly subscribes to or makes or causes to be made any false statements or false reports or false filings with the intent to deceive the Commissioner in the performance of his or her duties under this rule shall be subject to the penalties provided for in O.C.G.A. § 33-13-11 and any other relevant penalties that may be found in O.C.G.A. Title 33.Ga. Comp. R. & Regs. R. 120-2-23-.23
O.C.G.A. §§ 33-2-9, 33-13-3, 33-13-4.
Original Rule entitled "Exemption for Passive Investors" adopted. F. Aug. 18, 2020; eff. Aug. 24, 2020, as specified by the Agency.