ebook img

In the matter of the proposed merger of Berkshire Life Insurance Company and the Guardian Life Insurance Company of America PDF

40 Pages·2001·1.1 MB·English
Save to my drive
Quick download
Download
Most books are stored in the elastic cloud where traffic is expensive. For this reason, we have a limit on daily download.

Preview In the matter of the proposed merger of Berkshire Life Insurance Company and the Guardian Life Insurance Company of America

^ JW^ CS^\\,z: \/cj 'MMONWEALTH OF MASSACHUSETTS UMASS/AMHERST OFFICE OF CONSUMER AFFAIRS /?„, 31E0bb DEflS E7flt a AND BUSINESS REGULATION ""£/% SSfek DIVISION OF INSURANCE ^Cfifa . V * %»- SUFFOLK, ss Docket No. F 2001-0IB IN THE MATTER OF THE PROPOSED MERGER OF BERKSHIRE LIFE INSURANCE COMPANY AND THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA MEMORANDUM OF DECISION AND ORDER INTRODUCTION I. Berkshire Life Insurance Company, a Massachusetts domiciled mutual life insurance company ("Berkshire"), seeks to merge with and into The Guardian Life Insurance Company ofAmerica, a New York domiciled life insurance company ("Guardian"). By the terms ofthe companies' Amended and Restated Agreement and Plan of Merger, dated as ofAugust 31, 2000 (the "merger agreement"), Berkshire proposes to merge into Guardian, and Guardian would continue its corporate existence and remain New domiciled in and subject to the laws ofthe State of York, with its principal offices in New York, New York. Pursuant to Massachusetts General Laws ("M.G.L.") chapter 175, §19B ("Section 19B"), the proposed merger ("merger") and the merger agreement must be approved by the Commissioner ofInsurance for the Commonwealth ofMassachusetts (the "Commissioner"), who has broad discretion in granting such approval. M.G.L. c. 175, 2 § 19B.1 Pursuant to Section 19B, the merger must be: "evidenced by a written agreement assented to by a vote ofa majority (1) ofthe board ofdirectors ofeach domestic company;" and (2) "approved by the votes ofat least two thirds ofsuch policyholders as ." are present and voting at a special meeting . . . Berkshire has applied for and seeks such approval. The Commissioner's review ofthe merger and merger agreement under Section 19B is governed by 21 1 Code ofMassachusetts Regulations ("CMR") § 140.00, et seq. (the "merger regulation"), pursuant to which the Commissioner may consider the following factors in deciding whether to approve the merger: 1 the fairness ofthe terms and conditions ofthe merger agreement; . Section 19B applies to a merger by a domestic insurer with and into a foreign insurer, where the foreign insurer is the surviving company. M.G.L. c. 175, § 19B. 2 The statute also sets forth that the merger shall not be made "until a copy [ofthe agreement] . . . .and such other information as the commissioner may require, has been filed with [the commissioner] . . . nor until it has received from the commissioner a written authorization, in such form as he may prescribe, authorizing [the domestic company] ... to merge or consolidate and to execute such agreement. The commissioner may, in his discretion, refuse to issue such an authorization in any case, and his decision shall be final." M.G.L. chapter 175, section 19B. 3 The statute also references that the plan must be "approved by a vote ofthe stockholders ofsuch [domestic] company owning at least two thirds ofthe outstanding capital stock ofsuch [domestic] company . . . ." However, this provision has no application in the instant case since Berkshire has no stockholders. 2. whether the interests ofBerkshire policyholders are protected; and 3. whether the merger is in the public interest. The merger regulation also provides the Commissioner, or presiding officers appointed by the Commissioner, with the discretion to conduct a public hearing "in order to afford interested persons an opportunity to present data, views, arguments, or comments in regard to the proposed merger including, but not limited to, the [Merger] Agreement," . . . CMR 211 § 140.08 (the "public hearing"). Such public hearing was held on June 1, 2001 in Pittsfield, Massachusetts. The merger agreement may be approved if"subsequent to the special meeting of CMR policyholders, it appears that the requirements ofM.G.L. c. 175, § 19B, 211 140.00 CMR and other applicable laws, ifany, have been satisfied," 21 1 § 140.14. In addition, before the merger can take effect, New York law requires the approval ofthe Guardian Board ofDirectors and its policyholders as well as the approval A ofthe Commonwealth ofMassachusetts Division ofInsurance (the "Division"). number ofotherjurisdictions have laws that may affect the merger or the operations of the surviving company. The approval ofthosejurisdictions, where required, is also a condition precedent to the consummation ofthe merger, and Berkshire and Guardian have agreed to use their respective best efforts to file any required notices or otherwise take such actions as are necessary to obtain required approvals and to comply with applicable requirements in connection with the merger under such laws. PROCEDURAL BACKGROUND H. Promptly after its adoption on August 31, 2000, Berkshire submitted to the Division for approval, a duly executed and attested copy ofthe merger agreement, which had been unanimously approved by the two companies' respective boards ofdirectors. In connection with Berkshire's application, the Commissioner promptly designated an interdepartmental working group (the "working group") to conduct an CMR examination ofBerkshire under M.G.L. chapter 175, § 4 and 21 1 § 140.06, including a review ofthe merger agreement and to advise the Division with respect thereto. The Division thereafter engaged the services ofthe following outside and independent legal, actuarial/accounting and financial advisors to assist in the conduct of & & the examination: Stroock Stroock Lavan LLP, as legal advisors; Tillinghast Towers Perrin, as actuarial/accounting advisors; Dresdner Kleinwort Wasserstein, Inc., as KPMG financial advisors and LLP to evaluate Berkshire's compliance with mailing policyholder information. By letter dated September 7, 2000, the Commissioner recused herselffrom any participation in the process ofapproving or disapproving the merger and duly appointed Michael T. Caljouw and Richard A. Cody as her designated presiding officers. On April 3, 2001, pursuant to section 140.09(l)-(2) ofthe merger regulation, the presiding officers issued a written notice ofpublic hearing to Berkshire and directed that it be distributed to Berkshire's directors, officers, employees and policyholders, and to Guardian, no later _ than 30 days prior to the public hearing. , . Commencing on April 9, 2001, Berkshire sent, via first-class mail, the notice of public hearing, the proxy statement, the notice ofspecial meeting and certain explanatory materials to the Berkshire voting policyholders, as required by M.G.L. c. 175 § 19B and CMR 211 140.09. In addition, that same day, Berkshire also sent, via first class mail, the notice ofpublic hearing to all members ofits board ofdirectors, as well as to Guardian, and, at the request ofthe Division, notified all employees and officers ofBerkshire ofthe public hearing by posting the notice ofpublic hearing on Berkshire's website, by email and on employee bulletin boards. See Affidavit ofGina Cinelli Birchall. The merger regulation provides that the notice ofpublic hearing must also be published in a newspaper, as approved by the Commissioner, at least 30 days prior to the CMR public hearing. 21 1 § 140.09(5). Similarly, the notice ofspecial meeting must be provided in accordance with the applicable laws and published at least once a week for three successive weeks in some newspaper printed in the Commonwealth of Massachusetts (the "Commonwealth"). Since Guardian is outside ofthe Commonwealth, the notice ofspecial meeting must also be published at least once a week for three successive weeks in a newspaper printed in the towns where Guardian has its principal CMR offices. M.G.L. c. 175, § 19B; 21 1 § 140.13(2). As approved, Berkshire arranged for publication ofthe notice ofpublic hearing in The Berkshire Eagle, The Boston Globe, The Worcester Telegram and The Springfield Union News on April 24, 2001 and in the New York Times on April 25, 2001. See Affidavit ofGina Cinelli Birchall. The notice ofspecial meeting was duly published in The Berkshire Eagle, The Boston Globe, The Worcester Telegram and The Springfield Union News on April 24, May 1, and May 8, 2001 and in The New York Times on April 25, May 2, and May 9, 2001. See Affidavit ofGina Cinelli Birchall.

See more

The list of books you might like

Most books are stored in the elastic cloud where traffic is expensive. For this reason, we have a limit on daily download.