N.J.S. § 17B:20-4 Stock of Subsidiary Or Alien Corporations

• Library: New Jersey Permanent Statutes
• Edition: 2023
• Currency: Current through L. 2023, c. 194.
• Year: 2023
• Citation: N.J.S. § 17B:20-4

In addition to the authority expressly contained in this chapter and notwithstanding any limitation contained in this title, any domestic insurer may invest in the voting stock of one or more subsidiaries, as provided in this section.

a. As used in this section the following terms shall have the following meanings:

(1) "voting stock" as used with reference to any corporation means any shares of capital stock of such corporation having general voting power under ordinary circumstances, when voting (together with one or more other classes, if any) as a class, to elect a majority of the board of directors of such corporation irrespective of whether or not at the time stock of any other class or classes shall have, or might have, voting power by reason of the happening of any contingency, and shall also include voting trust certificates, certificates of deposit, interim receipts and other similar instruments representing such stock and

(2) "subsidiary" means a corporation of which a majority of the voting stock is owned or controlled by a domestic insurer, or by one or more subsidiaries of such insurer or by such insurer and one or more subsidiaries of such insurer, except that "subsidiary" shall not include a corporation of which a majority of the voting stock is acquired by the insurer or its subsidiaries pursuant to any other section of this chapter.

b. The business of a subsidiary, whether or not it is organized under the laws of this State, shall be limited to that authorized for a corporation organized under any law of this State, except that "subsidiary" shall not include any bank organized pursuant to the laws of this State and shall not include any national bank maintaining its principal office in this State.

c. (Deleted by amendment, P.L. 1989, c.267.)

d. The investments of any such subsidiary engaged exclusively in the ownership and management of assets authorized as investments for the insurer when added, on a basis proportional to the insurer's interest in such subsidiary, to the investments of such insurer (referred to herein as the "controlling insurer") shall not cause the investments of the controlling insurer to exceed any of the limitations applicable to domestic insurers contained in N.J.S. 17B:20-1 or N.J.S. 17B:20-2 of this chapter except as may be permitted by subsection h. of N.J.S. 17B:20-1 or N.J.S. 17B:20-3.

e. The investment in such subsidiary shall not tend substantially to lessen competition or tend to create a monopoly.