§ 23-69-304 - Formation of mutual insurance holding company.
23-69-304. Formation of mutual insurance holding company.
(a) A domestic mutual insurer, upon approval of the Insurance Commissioner, may reorganize by:
(1) Forming a mutual insurance holding company;
(2) Merging its policyholders' membership interests into the mutual insurance holding company; and
(3) Continuing the mutual insurer's corporate existence as a stock insurer subsidiary of the mutual insurance holding company.
(b) A domestic mutual insurer, upon the approval of the commissioner, may reorganize by merging its policyholders' membership interests into an existing mutual insurance holding company formed under subdivision (a)(1) of this section and by continuing the mutual insurer's corporate existence as a stock insurer subsidiary of the mutual insurance holding company.
(c) All of the initial shares of the capital stock of a reorganized stock insurer which has reorganized as described in subdivisions (a)(1) or (2) of this section shall be issued to the mutual insurance holding company or to a single intermediate stock holding company.
(d) (1) Policyholders of a domestic mutual insurer which has reorganized as described in subdivisions (a)(1) or (2) of this section shall be members of the mutual insurance holding company, and their voting rights shall be determined in accordance with the articles of incorporation and bylaws of the mutual insurance holding company.
(2) The mutual insurance holding company shall provide its members with the same membership rights as were provided to policyholders of the mutual insurer immediately prior to reorganization.
(3) The reorganization shall not reduce, limit, or affect the number or identity of the policyholders who may become members of the mutual insurance holding company or secure for individuals composing management any unfair advantage through or connected with the reorganization.
(e) (1) A mutual insurance holding company or an intermediate stock holding company formed under this subchapter shall not be authorized to transact the business of insurance.
(2) A mutual insurance holding company formed under this subchapter shall not issue stock.
(3) The commissioner shall have jurisdiction over a mutual insurance holding company and an intermediate stock holding company to ensure that policyholder's interests are protected.
(4) A mutual insurance holding company and an intermediate stock holding company shall be treated as domestic insurers subject to the conversion provisions of 23-69-141 and 23-68-101 et seq. regarding the rehabilitation and liquidation of insurance companies.
(5) The aggregate pledges and encumbrances of a mutual insurance holding company's assets shall not affect more than forty-nine percent (49%) of the mutual insurance holding company's stock in an intermediate stock holding company or a reorganized stock insurer.
(6) At least fifty percent (50%) of the net worth of a mutual insurance holding company, as determined by generally accepted accounting practices, shall be invested in insurers.
(7) (A) If any proceeding under 23-68-101 et seq. regarding the rehabilitation and liquidation of insurance companies is brought against a reorganized stock insurer, the mutual insurance holding company and intermediate stock holding company shall become parties to the proceedings.
(B) All of the assets of the mutual insurance holding company and intermediate stock holding company are deemed assets of the estate of the reorganized stock insurer to the extent necessary to satisfy claims against the reorganized stock insurer.
(8) No distribution to members of a mutual insurance holding company may occur without prior written approval of the commissioner and only upon the commissioner's satisfaction that such a distribution is fair and equitable to policyholders as members of the mutual insurance holding company.
(9) No solicitation for the sale of the stock of an intermediate stock holding company or a reorganized stock insurer may be made without the commissioner's prior written approval.
(10) A mutual insurance holding company or an intermediate stock holding company shall not voluntarily dissolve without the approval of the commissioner.