Except as provided in § 7-402 of this subtitle, this subtitle applies to any acquisition, agreement, arrangement, or activity, including the acquisition of voting securities or assets, bulk reinsurance, and merger, that results in a person acquiring directly or indirectly the control of an authorized insurer.

This subtitle does not apply to: an acquisition that is subject to the approval or disapproval of the Commissioner under Subtitle 3 of this title; a purchase of securities solely for investment purposes if the securities are not used for voting or otherwise to cause, or attempt to cause, the substantial lessening of competition in any insurance market in the State; a purchase of securities that results in a presumption of control under § 7-104 of this title, but the commissioner of the insurer’s state of domicile: accepts a disclaimer of control or affirmatively finds that control does not exist; and informs the Commissioner of the disclaimer or finding; an acquisition: in which both the acquiring and acquired persons are not, either directly or through affiliates, primarily engaged in the insurance business; and for which a pre-acquisition notification: is filed with the Commissioner under § 7-403 of this subtitle; or is not required because the acquisition otherwise is excluded from this subtitle by another provision of this subsection; an acquisition in which the acquiring and acquired persons already are affiliated; considering “market” to be the direct written insurance premium in the State for a line of business as contained in the annual statement required to be filed by authorized insurers, an acquisition that would not result immediately in: an increase in any market share; a combined market share of the acquiring and acquired insurers, their affiliates, and the person resulting from a merger that exceeds 5% of any one market; or in any one market: a market share increase of more than 2%; and a combined market share of the acquiring and acquired insurers, their affiliates, and the person resulting from a merger that exceeds 12%; an acquisition for which a pre-acquisition notification would be required under this subtitle only because of the resulting effect on the ocean marine insurance line of business; or an acquisition as to which the commissioner of the state of domicile of the acquired insurer affirmatively finds and informs the Commissioner that: the acquired insurer is in failing condition; there is a lack of feasible alternatives to improving the failing condition of the acquired insurer; and the public benefits from improving the acquired insurer’s condition through the acquisition outweigh the public benefits from not lessening competition.

The acquiring person in an acquisition subject to this subtitle must file a pre-acquisition notification with the Commissioner. The acquired person in an acquisition subject to this subtitle may file a pre-acquisition notification. The pre-acquisition notification must be filed at least 30 days before the acquisition subject to this subtitle is proposed to become effective. The pre-acquisition notification must be in the form and contain the information required by the National Association of Insurance Commissioners relating to those markets that, under § 7-402(6) of this subtitle, cause the acquisition not to be exempt from this subtitle. The Commissioner may require a pre-acquisition notification to contain: additional material and information that the Commissioner considers necessary to determine whether the proposed acquisition, if effective, would violate § 7-405(a)(1)(i) of this subtitle; and the opinion of an economist about the competitive impact of the acquisition in the State, together with a summary of the education and experience of the economist indicating the economist’s ability to make an informed opinion.

The waiting period for an acquisition subject to this subtitle: begins on the day the Commissioner receives the pre-acquisition notification; and ends on the earlier of: 30 days after the period begins; or the day on which the Commissioner ends the waiting period. During the waiting period for an acquisition subject to this subtitle, the Commissioner may require that additional information relevant to the proposed acquisition be filed. If the Commissioner requires additional information, the waiting period shall be extended to the earlier of: 30 days after the Commissioner receives the additional information; or the day on which the Commissioner ends the waiting period.

Except as provided in subsection (b) of this section, the Commissioner may enter an order under this section with respect to an acquisition subject to this subtitle if: there is substantial evidence that the effect of the acquisition may be substantially to lessen competition in any line of insurance in the State or tend to create a monopoly; or the insurer fails to file adequate information in compliance with § 7–403 of this subtitle. The order may: require an acquiring or acquired insurer, its affiliates, or the person resulting from a merger to cease and desist from doing business in the State with respect to the line of insurance involved in the violation; or deny the application of an acquiring or acquired insurer for a certificate of authority. The Commissioner may not enter an order under this section with respect to an acquisition subject to this subtitle if: the acquisition will yield substantial economies of scale or economies in resource utilization that cannot be achieved feasibly in any other way, and public benefits from those economies outweigh the public benefits from not lessening competition; or the acquisition will increase substantially the availability of insurance, and public benefits from that increase outweigh the public benefits from not lessening competition. In determining whether a proposed acquisition subject to this subtitle would violate subsection (a)(1)(i) of this section, the Commissioner shall consider an acquisition that involves two or more insurers, including insurers under common ownership, management, or control, that compete in the same product and geographical market to be prima facie evidence of violation of subsection (a)(1)(i) of this section if the acquiring and acquired insurers, their affiliates, or the person resulting from a merger: have a share of the market that exceeds the total of the two columns in the table under item (ii) of this paragraph, if more than two insurers are parties to the acquisition; or have the following shares of the market: Insurer A                          Insurer B 5%                               4% or more 10%                               3% or more 15%                               2% or more By treating the insurer with the largest share of the market as insurer “A”, the Commissioner may interpolate percentages not shown in the table under paragraph (1)(ii) of this subsection proportionately to the percentages that are shown. In the absence of sufficient information to the contrary: the relevant product market is the direct written insurance premium for a line of business as the line appears in the annual statement required to be filed by insurers doing business in the State; and the relevant geographical market is the State. In determining the relevant product and geographical markets, the Commissioner shall consider, among other things: any definitions or guidelines adopted by the National Association of Insurance Commissioners; and any information submitted by parties to the acquisition. Before the Commissioner enters an order under this section, the Commissioner shall: give the parties notice of a hearing on the proposed order before the end of the waiting period under § 7–404 of this subtitle and at least 15 days before the hearing is scheduled; and hold the hearing. The Commissioner shall enter an order after the conclusion of the hearing and no later than 60 days after the end of the waiting period. The order shall be accompanied by a written decision of the Commissioner, findings of fact, and conclusions of law. An order under this section may not become final earlier than 30 days after it is issued. Before an order becomes final, an insurer that is subject to the order may submit to the Commissioner a plan to remedy the anticompetitive impact of the acquisition within a reasonable time. Based on the plan or other information, the Commissioner may set conditions to be met while the anticompetitive impact is being remedied, and the order vacated or modified. An order under this section does not apply if the acquisition is not consummated. A person that violates a cease and desist order issued by the Commissioner under this section, after notice and hearing and on order of the Commissioner, is subject to a penalty not exceeding $10,000 for each day of violation or suspension or revocation of the person’s certificate of authority or both.

A person required to file a pre-acquisition notification under this subtitle or Subtitle 3 of this title that fails to file the notification and that also fails to demonstrate a good faith effort to comply with the filing requirement is subject to a penalty not exceeding $50,000.