§ 2604.02. Applications for Preorganization Permits.

NOTE: Applicants most commonly apply directly for a definitive permit without any intervening formal steps or preliminary permits. The sections herein provided relative to preorganization and subscription permits are only designed to accommodate the limited situations described therein. Definitive permits regularly authorize the taking of subscriptions.

A. Except as may otherwise be specifically provided by law, when individuals in the course of organizing a proposed insurer expect to engage in solicitation or obtain commitments which cannot lawfully be done without an appropriate permit, but will not take subscriptions for the purchase of securities, they should apply for a preorganization permit.

B. The fee for filing an application for a preorganization permit is $37.50 (Section 859(a)). Formal requirements, such as verification, number of copies, filing office, etc., are governed by Article 3 of these regulations.

C. Such an application shall set forth:

1. The names and addresses of the proposed organizers. It shall also incorporate by reference biographical affidavits on a form prescribed and furnished by the Commissioner, one of which shall be completed and sworn to by each organizer. The form of biographical affidavit is found in Section 2613.07, infra. (Sections 704.5, 717, 718, 843)

2. The names and addresses of all persons then known who are expected to be associated as officers, directors, or as key managerial personnel.

3. The kind of insurer to be organized, the nature of the business to be done and where.

4. The reason why such an insurer is proposed to be organized; any particular advantage it would enjoy; why, in the opinion of the promoters, it should succeed.

5. The capital structure of the proposed insurer, the par value (if any; see Section 690 for insurance companies) and the selling price of its shares, the number of shares proposed to be sold, by whom, where and how they are proposed to be sold and the commission to be paid or allowed thereon, the amounts of capital paid up and of unassigned surplus (if applicable) with which it is proposed to start business; also, the estimated expenses of organization and promotion.

6. The names and qualifications or, if it is not possible to identify them, a description by class of the persons to be solicited, the purpose of such solicitation, and the proposed dates of commencement and conclusion thereof.

D. Such permits may be issued without findings being made pursuant to Sections 839 and 839.1 of the Insurance Code, and will not authorize the taking of subscriptions for issuance or sale of any security, or the collection of any consideration for purchase of securities. (Sections 827.7, 843)

HISTORY

1. Amendment of subsection B filed 5-6-77 as procedural and organizational; effective upon filing (Register 77, No. 19).

Note

Note: Authority cited: Section 843, Insurance Code. Reference: Section 859(a), Insurance Code.