Idaho Admin. Code r. 18.07.01.058

Current through September 2, 2024

Section 18.07.01.058 - STOCK OFFERINGS

01.Prior Approval. A stock offering by a MHC, or by any of its direct or indirect insurance company or intermediate holding company subsidiaries, is subject to the Director's prior approval through this section's application and hearing process.

02.Application for Stock Offering Contents.

a. A description of the stock the applicant would offer, and of all shareholder rights;

b. The total number of shares authorized to be issued, the estimated number requested to offer, and the intended date or range of dates for the offer;

c. A justification for a uniform planned offering price, or of the method by which the offering price will be determined;

d. The name or names of any underwriter, syndicate member or placement agent involved and the known names of each entity, person, or group of persons to whom the stock offering is to be made who will control at least five percent (5%) of the total outstanding class of shares, and the manner in which the offer is to be tendered. If the entity or person is a corporation or business organization, the name of each member of its board of directors or equivalent management will be provided with the name. Copies of Securities and Exchange Commission filings disclosing intended stock acquisitions will be included;

e. A description of stock subscription rights afforded to MHC members in conjunction with the stock offering;

f. A detailed description of all expenses to be incurred in the stock offering;

g. How funds raised by the stock offering will be used; and

h. Any other information the Director requests.

03.Prescribed Provisions. The stock offering plan will state:

a. Officers, directors, and insiders of the MHC and its direct or indirect subsidiaries and affiliates are restricted from purchasing or owning shares of the stock offering, or issuance of stock options to or for the benefit of such officers, directors and insiders, for at least six (6) months following the first public offering date and regularly trading of the stock. Officers, directors and insiders are not barred from exercising subscription rights accorded to members of the MHC, except that, pursuant to those rights, the officers, directors, and insiders of the MHC and its direct or indirect subsidiaries and affiliates cannot purchase or own, in the aggregate, more than five percent (5%) of the stock offering for at least six (6) months following the first date of the public offering and regular trading of the stock;

b. A majority of the members of the MHC's board of directors cannot be an interested person of the MHC or of an affiliated person of the MHC. The Director may waive this requirement for good cause;

c. The MHC will adopt articles of incorporation barring any waiver of dividends from stock subsidiaries except under conditions specified in the articles and after approval of the waiver by the MHC's board of directors and the Director;

d. After the initial stock offering by a direct or indirect insurance company or intermediate insurance company subsidiary of a MHC, the boards of directors of each such insurance company or intermediate holding company will include at least three (3) directors who are not interested persons of the MHC; and

e. The board of directors of the corporation offering stock need to establish, a pricing committee consisting exclusively of directors who are interested persons. The committee's responsibility is to evaluate and approve the price of any stock offering.

04.More Than One Class of Stock. An insurance company or intermediate insurance holding company subsidiary of a MHC may issue more than one (1) class of stock. At all times a majority of the voting stock will be held by the MHC or its subsidiary and, no class of common stock may have greater dividend or other rights than the class held by the MHC or its subsidiary.

05.Experts. The Director may hire experts to help review the application, at the applicant's expense.

06.Public Hearing. A public hearing may be held on any stock offering application. A stock offering including an initial offering of stock is expressly subject to a public hearing. The applicant will provide a Director-approved hearing notice to MHC members at least twenty (20) days before the hearing.

07.Approval. The Director may approve the stock offering plan if:

a. The method for establishing the stock offering price is consistent with generally accepted market or industry practices for establishing stock offering prices; and

b. The offering will not unfairly impact the interests of MHC members.

08.Concurrent Filing with SEC. Filing a registration statement with the Securities and Exchange Commission before, or concurrently with, notice to the MHC members is permitted.

09.Subsequent Offerings of Publicly Traded Stock.

a. Notwithstanding Section 013, stock offerings, besides an initial stock offering, through which stock offered is regularly traded on the New York Stock Exchange, the American Stock Exchange, or another Director-approved exchange, or designated on the national association of securities dealers automated quotations - national market system (NASDAQ), is subject to this procedure: If a MHC or direct or indirect insurance company or intermediate insurance company subsidiary thereof intends to make a stock offering governed by this section, the entity will notify the Director, at least thirty (30) days before the offering, regarding:

i. The total number of shares intended to be offered;

ii. The intended date of sale;

iii. Evidence the stock is regularly traded on one of the public exchanges noted above; and

iv. A record of the stock's trading pace and volume during the prior fifty-two (52) weeks.

b. The Director may object to the offering within thirty (30) days after receiving the notice. Upon an objection, the procedures in Subsection 059.02 will be followed to determine approval.

10.Approval Expiration. A stock-offering approval under Subsections 059.06, 059.07, or 059.08 expires ninety (90) days after the approval date, except as provided by the Director's order.

11.Representation of Director's Approval. A prospectus, information, sales material or sales presentation by the applicant, or a representative, agent or affiliate of the applicant, will not represent that the Director's approval constitutes an endorsement of the price, price range, or any other information relating to the stock.

Idaho Admin. Code r. 18.07.01.058

Effective April 6, 2023