§40-14B-4. Prohibited activities.

(a) An insurance company or other persons who may have state premium tax liability or the affiliates of the insurance companies or other persons may not, directly or indirectly, do any of the following:

(1) Manage a certified capital company.

(2) Beneficially own, whether through rights, options, convertible interests, or otherwise, more than 15 percent of the outstanding voting securities of a certified capital company.

(3) Control the direction of investments for a certified capital company.

(b) Not more than one certified investor in any certified capital company or affiliates thereof, may provide a guaranty, indemnity, bond, insurance policy, or other payment undertaking in favor of all of the certified investors of the certified capital company and its affiliates.

(c) Subsection (a) applies without regard to whether the insurance company or other person or the affiliate of the insurance company or other person is licensed by or transacts business in this state.

(d) This chapter does not preclude a certified investor, an insurance company, or any other person from exercising its legal rights and remedies, including interim management of a certified capital company, if authorized by law, with respect to a certified capital company that is in default of its statutory or contractual obligations to the certified investor, insurance company, or other person, or establishing controls to ensure that the certified capital company satisfies the requirements of this chapter.

(e) Nothing in this section shall limit an insurance company's ownership of nonvoting equity interests in a certified capital company.

(Act 2002-429, p. 1108, §4.)