PRINTER'S NO. 4059
No. 2680 Session of 2008
INTRODUCED BY TURZAI, CAUSER, CLYMER, DALLY, FAIRCHILD, GINGRICH, GRELL, HARHART, HENNESSEY, HORNAMAN, McILHATTAN, R. MILLER, MURT, MUSTIO, PICKETT, PYLE, RAPP, ROCK, RUBLEY, SONNEY, STERN, R. STEVENSON, SWANGER, WATSON AND YOUNGBLOOD, JUNE 25, 2008
REFERRED TO COMMITTEE ON INSURANCE, JUNE 25, 2008
AN ACT 1 Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An 2 act relating to insurance; amending, revising, and 3 consolidating the law providing for the incorporation of 4 insurance companies, and the regulation, supervision, and 5 protection of home and foreign insurance companies, Lloyds 6 associations, reciprocal and inter-insurance exchanges, and 7 fire insurance rating bureaus, and the regulation and 8 supervision of insurance carried by such companies, 9 associations, and exchanges, including insurance carried by 10 the State Workmen's Insurance Fund; providing penalties; and 11 repealing existing laws," further providing for effect of act 12 on existing laws, for definitions relating to insurance 13 holding companies, for acquisition of control of or merger 14 with domestic insurer and for acquisitions involving insurers 15 not otherwise covered; providing for consolidations with 16 domestic insurers; and making a repeal. 17 The General Assembly of the Commonwealth of Pennsylvania 18 hereby enacts as follows: 19 Section 1. Section 108 of the act of May 17, 1921 (P.L.682, 20 No.284), known as The Insurance Company Law of 1921, is amended 21 to read: 22 Section 108. Effect of Act on Existing Laws.--The provisions 23 of this act, so far as they are the same as those of existing
1 laws, shall be construed as a continuation of such laws and not 2 as new enactments. The repeal by this act of any provision of 3 law shall not revive any law heretofore repealed or superseded, 4 nor shall such repeal affect any act done, liability incurred, 5 or any right accrued or vested, or any suit or prosecution 6 pending or to be instituted to enforce any right or penalty or 7 punish any offense under the authority of the repealed laws. The 8 provisions of this act shall not limit the jurisdiction and 9 authority of the Office of Attorney General, including, but not 10 limited to, the jurisdiction and authority granted pursuant to 11 the act of October 15, 1980 (P.L.950, No.164), known as the 12 "Commonwealth Attorneys Act." 13 Section 2. Section 1401 introductory paragraph and the 14 definitions of "insurer" and "person" of the act, amended 15 December 20, 2000 (P.L.967, No.132), are amended and the section 16 is amended by adding a definition to read: 17 Section 1401. Definitions.--As used in this article, and for 18 the purposes of this article only, the following words and 19 phrases shall have the meanings given to them in this section: 20 * * * 21 "Insurer." Any health maintenance organization, preferred 22 provider organization, company, association [or], exchange, 23 hospital plan corporation subject to 40 Pa.C.S. Ch. 61 (relating 24 to hospital plan corporations) or professional health services 25 plan corporation subject to 40 Pa.C.S. Ch. 63 (relating to 26 professional health services plan corporations) authorized by 27 the Insurance Commissioner to transact the business of insurance 28 in this Commonwealth except that the term shall not include: 29 (1) the Commonwealth or any agency or instrumentality 30 thereof; 20080H2680B4059 - 2 -
1 (2) agencies, authorities or instrumentalities of the United 2 States, its possessions and territories, the Commonwealth of 3 Puerto Rico, the District of Columbia or a state or political 4 subdivision; 5 (3) fraternal benefit societies; or 6 (4) nonprofit medical and hospital service associations. 7 * * * 8 "Person." An individual, an insurer, a corporation, a 9 partnership, a limited liability company, an association, a 10 joint stock company, a trust, an unincorporated organization, 11 any similar entity or any combination of the foregoing acting in 12 concert. The term shall not include any joint venture 13 partnership exclusively engaged in owning, managing, leasing or 14 developing real or tangible personal property. 15 * * * 16 "Shareholder." A record holder or record owner of shares of 17 an insurer. 18 (1) The term shall include all of the following: 19 (i) A member of an insurer that is a domestic nonstock 20 corporation under 15 Pa.C.S. Ch. 21 (relating to nonstock 21 corporations) or a prior statute. 22 (ii) A member, as defined in 15 Pa.C.S. § 5103 (relating to 23 definitions), of an insurer that is a domestic nonprofit 24 corporation under 15 Pa.C.S. Ch. 51 (relating to general 25 provisions) or a prior statute. 26 (iii) A subscriber of an insurer that is a domestic 27 reciprocal exchange under Article X or a prior statute. 28 (2) The term shall not include any subscriber, insured or 29 customer of: 30 (i) a hospital plan corporation subject to 40 Pa.C.S. Ch. 61 20080H2680B4059 - 3 -
1 (relating to hospital plan corporations); or 2 (ii) a professional health services plan corporation subject 3 to 40 Pa.C.S. Ch. 63 (relating to professional health services 4 plan corporations). 5 * * * 6 Section 3. Section 1402 of the act, amended or added 7 December 18, 1992 (P.L.1519, No.178) and December 21, 1998 8 (P.L.1108, No.150), is amended to read: 9 Section 1402. Acquisition of Control of or Merger or 10 Consolidation with Domestic Insurer.--(a) (1) No person other 11 than the issuer shall make a tender offer for or a request or 12 invitation for tenders of, or enter into any agreement to 13 exchange securities or seek to acquire or acquire in the open 14 market or otherwise, any voting security of a domestic insurer 15 if, after the consummation thereof, such person would directly 16 or indirectly or by conversion or by exercise of any right to 17 acquire, be in control of such insurer, and no person shall 18 enter into an agreement to merge or consolidate with or 19 otherwise to acquire control of a domestic insurer or any person 20 controlling a domestic insurer unless, at the time any such 21 offer, request or invitation is made or any such agreement is 22 entered into or prior to the acquisition of such securities if 23 no offer or agreement is involved, such person has filed with 24 the department and has sent to such insurer a statement 25 containing the information required by this section and such 26 offer, request, invitation, agreement or acquisition has been 27 approved by the department in the manner hereinafter prescribed. 28 (2) For purposes of this section, a "domestic insurer" shall 29 include any person controlling a domestic insurer unless such 30 person as determined by the department is either directly or 20080H2680B4059 - 4 -
1 through its affiliates primarily engaged in business other than
2 the business of insurance. Such person shall, however, file a
3 preacquisition notification with the department containing the
4 information set forth in section 1403(c)(2) thirty (30) days
5 prior to the proposed effective date of the acquisition. Failure
6 to file is subject to section 1403(e)(3). For purposes of this
7 section, "person" shall not include any securities broker
8 holding, in the usual and customary manner, less than twenty per
9 centum (20%) of the voting securities of an insurance company or
10 of any person which controls an insurance company.
11 (b) The statement to be filed with the department under this
12 section shall be made under oath or affirmation and shall
13 contain the following information:
14 (1) The name and address of each person by whom or on whose
15 behalf the merger, consolidation or other acquisition of control
16 referred to in subsection (a) is to be effected, hereinafter
17 called "acquiring party," and
18 (i) if such person is an individual, his principal
19 occupation and all offices and positions held during the past
20 five (5) years, and any conviction of crimes other than minor
21 traffic violations during the past ten (10) years; or
22 (ii) if such person is not an individual, a report of the
23 nature of its business operations during the past five (5) years
24 or for such lesser period as the person and any predecessors
25 thereof shall have been in existence; an informative description
26 of the business intended to be done by the person and the
27 person's subsidiaries; and a list of all individuals who are or
28 who have been selected to become directors or executive officers
29 of the person, or who perform or will perform functions
30 appropriate to those positions. This list shall include for each
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1 individual the information required by subparagraph (i).
2 (2) The source, nature and amount of the consideration used
3 or to be used in effecting the merger, consolidation or other
4 acquisition of control, a description of any transaction wherein
5 funds were or are to be obtained for any such purpose, including
6 any pledge of the insurer's stock or the stock of any of its
7 subsidiaries or controlling affiliates, and the identity of
8 persons furnishing such consideration, provided, however, that
9 where a source of such consideration is a loan made in the
10 lender's ordinary course of business, the identity of the lender
11 shall remain confidential if the person filing such statement so
12 requests.
13 (3) Fully audited financial information as to the earnings
14 and financial condition of each acquiring party for the
15 preceding five (5) fiscal years of each such acquiring party, or
16 for such lesser period as such acquiring party and any
17 predecessors thereof shall have been in existence, and similar
18 unaudited information as of a date not earlier than ninety (90)
19 days prior to the filing of the statement.
20 (4) Any plans or proposals which each acquiring party may
21 have to liquidate such insurer, to sell its assets or merge or
22 consolidate it with any person or to make any other material
23 change in its business or corporate structure or management.
24 (5) The number of shares of any security referred to in
25 subsection (a) which each acquiring party proposes to acquire,
26 and the terms of the offer, request, invitation, agreement or
27 acquisition referred to in subsection (a), and a statement as to
28 the method by which the fairness of the proposal was arrived.
29 (6) The amount of each class of any security referred to in
30 subsection (a) which is beneficially owned or concerning which
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1 there is a right to acquire beneficial ownership by each 2 acquiring party. 3 (7) A full description of any contracts, arrangements or 4 understandings with respect to any security referred to in 5 subsection (a) in which any acquiring party is involved, 6 including, but not limited to, transfer of any of the 7 securities, joint ventures, loan or option arrangements, puts or 8 calls, guarantees of loans, guarantees against loss or 9 guarantees of profits, division of losses or profits, or the 10 giving or withholding of proxies. Such description shall 11 identify the persons with whom such contracts, arrangements or 12 understandings have been entered into. 13 (8) A description of the purchase of any security referred 14 to in subsection (a) during the twelve calendar months preceding 15 the filing of the statement, by any acquiring party, including 16 the dates of purchase, names of the purchasers and consideration 17 paid or agreed to be paid therefor. 18 (9) A description of any recommendations to purchase any 19 security referred to in subsection (a) made during the twelve 20 calendar months preceding the filing of the statement, by any 21 acquiring party, or by anyone based upon interviews or at the 22 suggestion of such acquiring party. 23 (10) Copies of all tender offers for, requests or 24 invitations for tenders of, exchange offers for and agreements 25 to acquire or exchange any securities referred to in subsection 26 (a) and, if distributed, of additional soliciting material 27 relating thereto. 28 (11) The term of any agreement, contract or understanding 29 made with or proposed to be made with any broker-dealer as to 30 solicitation of securities referred to in subsection (a) for 20080H2680B4059 - 7 -
1 tender and the amount of any fees, commissions or other 2 compensation to be paid to broker-dealers with regard thereto. 3 (12) Such additional information as the department may by 4 rule or regulation prescribe as necessary or appropriate for the 5 protection of policyholders of the insurer or in the public 6 interest. 7 (c) If the person required to file the statement referred to 8 in subsection (a) is a partnership, limited partnership, 9 syndicate or other group, the department may require that the 10 information called for by subsection (b)(1) through (12) shall 11 be given with respect to each partner of such partnership or 12 limited partnership, each member of such syndicate or group and 13 each person who controls such partner or member. If any such 14 partner, member or person is a corporation or the person 15 required to file the statement referred to in subsection (a) is 16 a corporation, the department may require that the information 17 called for by subsection (b)(1) through (12) shall be given with 18 respect to such corporation, each officer and director of such 19 corporation and each person who is directly or indirectly the 20 beneficial owner of more than ten per centum (10%) of the 21 outstanding voting securities of such corporation. 22 (d) If any material change occurs in the facts set forth in 23 the statement filed with the department and sent to such insurer 24 pursuant to this section, an amendment setting forth such 25 change, together with copies of all documents and other material 26 relevant to such change, shall be filed with the department and 27 sent to such insurer within two (2) business days after the 28 person learns of such change. 29 (e) If any offer, request, invitation, agreement or 30 acquisition referred to in subsection (a) is proposed to be made 20080H2680B4059 - 8 -
1 by means of a registration statement under the Securities Act of 2 1933 (48 Stat. 74, 15 U.S.C. § 77a et seq.), or in circumstances 3 requiring the disclosure of similar information under the 4 Securities Exchange Act of 1934 (48 Stat. 881, 15 U.S.C. § 78a 5 et seq.), or under a State law requiring similar registration or 6 disclosure, the person required to file the statement referred 7 to in subsection (a) may utilize such documents in furnishing 8 the information called for by that statement. 9 (f) (1) The department shall approve any merger, 10 consolidation or other acquisition of control referred to in 11 subsection (a) unless it finds any of the following: 12 (i) After the change of control, the domestic insurer 13 referred to in subsection (a) would not be able to satisfy the 14 requirements for the issuance of a license to write the line or 15 lines of insurance for which it is presently licensed. 16 (ii) The effect of the merger, consolidation or other 17 acquisition of control would be to substantially lessen 18 competition in insurance in this Commonwealth or tend to create 19 a monopoly therein. In applying the competitive standard in this 20 subparagraph: 21 (A) the informational requirements of section 1403(c)(2) and 22 the standards of section 1403(d)(2) shall apply; 23 (B) the merger, consolidation or other acquisition shall not 24 be disapproved if the department finds that any of the 25 situations meeting the criteria provided by section 1403(d)(3) 26 exist; and 27 (C) the department may condition the approval of the merger, 28 consolidation or other acquisition on the removal of the basis 29 of disapproval within a specified period of time. 30 (iii) The financial condition of any acquiring party is such 20080H2680B4059 - 9 -
1 as might jeopardize the financial stability of the insurer or 2 prejudice the interest of its policyholders. 3 (iv) The plans or proposals which the acquiring party has to 4 liquidate the insurer, sell its assets or consolidate or merge 5 it with any person, or to make any other material change in its 6 business or corporate structure or management, are unfair and 7 unreasonable to policyholders of the insurer and not in the 8 public interest. 9 (v) The competence, experience and integrity of those 10 persons who would control the operation of the insurer are such 11 that it would not be in the interest of policyholders of the 12 insurer and of the public to permit the merger, consolidation or 13 other acquisition of control. 14 (vi) The [acquisition] merger, consolidation or other 15 acquisition of control is likely to be hazardous or prejudicial 16 to the insurance buying public. 17 (vii) The merger, consolidation or other acquisition of 18 control is not in compliance with the laws of this Commonwealth, 19 including Article VIII-A. 20 (2) If the merger, consolidation or other acquisition of 21 control is approved, the department shall so notify the person 22 filing the statement and the insurer [whose stock] that is 23 proposed to be acquired, and such a determination is hereafter 24 referred to as an approving determination. Notice shall also be 25 given by the department of any determination which is not an 26 approving determination. If an approving determination is made 27 by the department and not otherwise, the proposed offer and 28 acquisition may thereafter be made and consummated on the terms 29 and conditions and in the manner described in the statement and 30 subject to such conditions as may be prescribed by the 20080H2680B4059 - 10 -
1 department as hereinafter provided. An approving determination 2 by the department shall be deemed to extend to offers or 3 acquisitions made pursuant thereto within one year following the 4 date of determination. The department may, as a condition of its 5 approving determination, require the inclusion in any offer of 6 provisions requiring the offer to remain open a specified 7 minimum length of time, permitting withdrawal of shares 8 deposited prior to the time the offeror becomes bound to 9 consummate the acquisition and requiring pro rata acceptance of 10 any shares deposited pursuant to the offer. The department shall 11 hold a hearing before making the determination required by this 12 subsection if, within ten (10) days following the filing with 13 the department of the statement, written request for the holding 14 of such hearing is made either by the person proposing to make 15 the acquisition, by the insurer [whose stock] that is proposed 16 to be acquired or, if [such] the issuer of stock proposed to be 17 acquired is not an insurer, by the [insurance company] insurer 18 controlled by such issuer. Otherwise, the department shall 19 determine in its discretion whether such a hearing shall be 20 held. Thirty (30) days' notice of any such hearing shall be 21 given to the person proposing to make the acquisition, to the 22 issuer whose stock is proposed to be acquired and, if such 23 issuer is not an insurer, to the insurance company controlled by 24 such issuer. Notice of any such hearing shall also be given to 25 such other persons, if any, as the department may determine. 26 (3) The department may retain at the acquiring person's 27 expense any attorneys, actuaries, accountants and other experts 28 not otherwise a part of the department's staff as may be 29 reasonably necessary to assist the department in reviewing the 30 proposed acquisition of control. 20080H2680B4059 - 11 -
1 (g) The provisions of this section shall not apply to any 2 offer, request, invitation, agreement or acquisition which the 3 department by order shall exempt therefrom as: 4 (1) not having been made or entered into for the purpose and 5 not having the effect of changing or influencing the control of 6 a domestic insurer; or 7 (2) as otherwise not comprehended within the purposes of 8 this section. 9 (h) The following shall constitute a violation of this 10 section: 11 (1) the failure to file any statement, amendment or other 12 material required to be filed pursuant to subsection (a) or (b); 13 (2) the effectuation or any attempt to effectuate an 14 acquisition of control of or merger or consolidation with a 15 domestic insurer unless the department has given its approval 16 thereto; or 17 (3) a violation of section 819-A. 18 (i) (1) The department shall, within seventy-two (72) hours 19 of receiving a statement filed under this section, provide 20 notification of receipt of the statement to the Office of 21 Attorney General, the chair of the Banking and Insurance 22 Committee of the Senate and the chair of the Insurance Committee 23 of the House of Representatives. 24 (2) The Office of Attorney General, the Banking and 25 Insurance Committee of the Senate and the Insurance Committee of 26 the House of Representatives may submit written comments and 27 recommendations on the statement to the department within the 28 period of time allotted by the department for public comment on 29 the filing. 30 Section 4. Section 1403(a), (b) and (d), added December 18, 20080H2680B4059 - 12 -
1 1992 (P.L.1519, No.178), are amended to read: 2 Section 1403. Acquisitions Involving Insurers not Otherwise 3 Covered.--(a) As used in this section the following words and 4 phrases shall have the meanings given to them in this 5 subsection: 6 "Acquisition." Any agreement, arrangement or activity the 7 consummation of which results in a person acquiring, directly or 8 indirectly, the control of another person and includes, but is 9 not limited to, the acquisition of voting securities, the 10 acquisition of assets, bulk reinsurance [and], mergers and 11 consolidations. 12 "Involved insurer." Includes an insurer which either 13 acquires or is acquired, is affiliated with an acquirer or 14 acquired or is the result of a merger or consolidation. 15 (b) (1) Except as exempted in paragraph (2), this section 16 applies to any acquisition in which there is a change in control 17 of an insurer authorized to do business in this Commonwealth. 18 (2) This section shall not apply to any of the following: 19 (i) An acquisition subject to approval or disapproval by the 20 department pursuant to section 1402. 21 (ii) A purchase of securities solely for investment purposes 22 so long as such securities are not used by voting or otherwise 23 to cause or attempt to cause the substantial lessening of 24 competition in any insurance market in this Commonwealth. If a 25 purchase of securities results in a presumption of control as 26 described in the definition of "control" in section [1301] 1401, 27 it is not solely for investment purposes unless the insurance 28 department of the insurer's state of domicile accepts a 29 disclaimer of control or affirmatively finds that control does 30 not exist and such disclaimer action or affirmative finding is 20080H2680B4059 - 13 -
1 communicated by the domiciliary insurance department to the 2 Insurance Department of the Commonwealth. 3 (iii) The acquisition of a person by another person when 4 both persons are neither directly nor through affiliates 5 primarily engaged in the business of insurance, if 6 preacquisition notification is filed with the department in 7 accordance with subsection (c)(2) thirty (30) days prior to the 8 proposed effective date of the acquisition. However, such 9 preacquisition notification is not required for exclusion from 10 this section if the acquisition would otherwise be excluded from 11 this section by this paragraph. 12 (iv) The acquisition of already affiliated persons. 13 (v) An acquisition if, as an immediate result of the 14 acquisition: 15 (A) in no market would the combined market share of the 16 involved insurers exceed five per centum (5%) of the total 17 market; 18 (B) there would be no increase in any market share; or 19 (C) in no market would: 20 (I) the combined market share of the involved insurers 21 exceeds twelve per centum (12%) of the total market; and 22 (II) the market share increases by more than two per centum 23 (2%) of the total market. 24 For the purpose of this subparagraph, a market means direct 25 written insurance premium in this Commonwealth for a line of 26 business as contained in the annual statement required to be 27 filed by insurers licensed to do business in this Commonwealth. 28 (vi) An acquisition for which a preacquisition notification 29 would be required pursuant to this section due solely to the 30 resulting effect on the ocean marine insurance line of business. 20080H2680B4059 - 14 -
1 (vii) An acquisition of an insurer whose domiciliary 2 insurance department affirmatively finds that such insurer is in 3 failing condition; there is a lack of feasible alternative to 4 improving such condition; the public benefits of improving such 5 insurer's condition through the acquisition exceed the public 6 benefits that would arise from not lessening competition; and 7 such findings are communicated by the domiciliary insurance 8 department to the Insurance Department of the Commonwealth. 9 (3) Sections 1409(b) and (c) and 1411 shall not apply to 10 acquisitions provided for in this subsection. 11 * * * 12 (d) (1) The department may enter an order under subsection 13 (e)(1) with respect to an acquisition if there is substantial 14 evidence that the effect of the acquisition may be substantially 15 to lessen competition in any line of insurance in this 16 Commonwealth or tend to create a monopoly therein or if the 17 insurer fails to file adequate information in compliance with 18 subsection (c). 19 (2) In determining whether a proposed acquisition would 20 violate the competitive standard of paragraph (1), the 21 department shall consider the following: 22 (i) Any acquisition covered under subsection (b) involving 23 two or more insurers competing in the same market is prima facie 24 evidence of violation of the competitive standards as follows: 25 (A) if the market is highly concentrated and the involved 26 insurers possess the following shares of the market: 27 Insurer A Insurer B 28 4% 4% or more 29 10% 2% or more 30 15% 1% or more; or 20080H2680B4059 - 15 -
1 (B) if the market is not highly concentrated and the 2 involved insurers possess the following shares of the market: 3 Insurer A Insurer B 4 5% 5% or more 5 10% 4% or more 6 15% 3% or more 7 19% 1% or more. 8 A highly concentrated market is one in which the share of the 9 four largest insurers is seventy-five per centum (75%) or more 10 of the market. Percentages not shown in the tables are 11 interpolated proportionately to the percentages that are shown. 12 If more than two insurers are involved, exceeding the total of 13 the two columns in the table is prima facie evidence of 14 violation of the competitive standard in paragraph (1). For the 15 purpose of this subparagraph, the insurer with the largest share 16 of the market shall be deemed to be insurer A. 17 (ii) There is a significant trend toward increased 18 concentration when the aggregate market share of any grouping of 19 the largest insurers in the market, from the two largest to the 20 eight largest, has increased by seven per centum (7%) or more of 21 the market over a period of time extending from any base year 22 five (5) to ten (10) years prior to the acquisition up to the 23 time of the acquisition. Any acquisition [or merger] covered 24 under subsection (b) involving two or more insurers competing in 25 the same market is prima facie evidence of violation of the 26 competitive standard in paragraph (1) if: 27 (A) there is a significant trend toward increased 28 concentration in the market; 29 (B) one of the insurers involved is one of the insurers in a 30 grouping of such large insurers showing the requisite increase 20080H2680B4059 - 16 -
1 in the market share; and 2 (C) another involved insurer's market is two per centum (2%) 3 or more. 4 (iii) For the purposes of this paragraph: 5 (A) The term "insurer" includes any company or group of 6 companies under common management, ownership or control. 7 (B) The term "market" means the relevant product and 8 geographical markets. In determining the relevant product and 9 geographical markets, the department shall give due 10 consideration to, among other things, the definitions or 11 guidelines, if any, promulgated by the NAIC and to information, 12 if any, submitted by parties to the acquisition. In the absence 13 of sufficient information to the contrary, the relevant product 14 market is assumed to be the direct written insurance premium for 15 a line of business, such line being that used in the annual 16 statement required to be filed by insurers doing business in 17 this Commonwealth and the relevant geographical market is 18 assumed to be this Commonwealth. 19 (C) The burden of showing prima facie evidence of violation 20 of the competitive standard rests upon the commissioner. 21 (iv) Even though an acquisition is not prima facie violative 22 of the competitive standard under subparagraphs (i) and (ii), 23 the department may establish the requisite anticompetitive 24 effect based upon other substantial evidence. Even though an 25 acquisition is prima facie violative of the competitive standard 26 under subparagraphs (i) and (ii), a party may establish the 27 absence of the requisite anticompetitive effect based upon other 28 substantial evidence. Relevant factors in making a determination 29 under this paragraph include, but are not limited to, the 30 following: market shares, volatility of ranking of market 20080H2680B4059 - 17 -
1 leaders, number of competitors, concentration, trend of 2 concentration in the industry and ease of entry and exit into 3 the market. 4 (3) An order may not be entered under subsection (e)(1) if: 5 (i) the acquisition will yield substantial economies of 6 scale or economies in resource utilization that cannot be 7 feasibly achieved in any other way, and the public benefits 8 which would arise from such economies exceed the public benefits 9 which would arise from not lessening competition; or 10 (ii) the acquisition will substantially increase the 11 availability of insurance, and the public benefits of such 12 increase exceed the public benefits which would arise from not 13 lessening competition. 14 * * * 15 Section 5. The act of December 19, 1990 (P.L.834, No.198), 16 known as the GAA Amendments Act of 1990, is repealed insofar as 17 it is inconsistent with this act. 18 Section 6. This act shall not apply to any merger, 19 consolidation or other acquisition of control made, completed or 20 consummated prior to the effective date of this act and, if 21 required, following the issuance of an approving determination. 22 Section 7. This act shall take effect immediately. E29L40JAM/20080H2680B4059 - 18 -