CHAPTER 12. EFFECT OF PENDING CLAIMS ON THE DISTRIBUTION OF CONSIDERATION TO MEMBERS
IC 27-15-12
Chapter 12. Effect of Pending Claims on the Distribution of
Consideration to Members
IC 27-15-12-1
Delay of distribution
Sec. 1. All or part of the consideration to be distributed to some
or all of the eligible members may be delayed by more than six (6)
months following the effective date of the plan of conversion if:
(1) the plan of conversion includes a provision for the
establishment of a trust for that purpose; and
(2) one (1) or more of the following claims have been asserted
against a converting mutual and remain unresolved at the
effective date of the plan of conversion:
(A) A claim seeking the imposition of a constructive or
charitable trust on assets of the converting mutual for the
benefit of policyholders, members, or other identified or
unidentified persons.
(B) A claim seeking distribution or return of assets, or other
form of compensation, from the converting mutual to
policyholders, members, or other identified or unidentified
persons.
(C) A claim that arises out of or relates to the ownership
interest of members of the converting mutual, or to the value
of their ownership interests, including any claim that
challenges a statutory transaction engaged in by the
converting mutual before the effective date of the plan of
conversion.
As added by P.L.94-1999, SEC.3.
IC 27-15-12-2
Formation of trust under trust agreement; beneficiaries;
satisfaction of claims; reports
Sec. 2. (a) At the effective date of the plan of conversion, assets
adequate to satisfy a claim described in section 1 of this chapter,
consisting of the consideration that otherwise would be distributed
directly to eligible members, must be placed in trust under a trust
agreement in a form approved by the commissioner. The trustee or
trustees of the trust shall:
(1) be appointed by the board of directors of the converting
mutual, subject to disapproval of any trustee by the
commissioner; and
(2) consist of one (1) or more institutions authorized by Indiana
law to act as corporate trustees.
(b) The beneficiaries of the trust:
(1) are the eligible members who, in the absence of the claims,
would have been entitled to the consideration placed in the
trust; and
(2) may consist of all of the eligible members or specified
classes or groups of eligible members.
(c) Assets of the trust shall be made available to pay or otherwise
satisfy the claims for which the trust has been established, the
expenses of the trust in contesting or resolving those claims, and any
other reasonable expenses of the trust. Upon final resolution of the
claims, by judgment, settlement or otherwise, or at such other times
as may be provided for in the trust agreement, the remaining assets
of the trust shall be distributed to the beneficiaries in accordance
with their respective interests in the trust.
(d) Until the trust has been terminated, the trustee or trustees shall
prepare reports not less frequently than annually, upon termination
of the trust, and at such other times as may be requested by the
commissioner or the former mutual. The reports must contain
information regarding the financial condition of the trust and the
status of any resolved and pending claims. The reports shall be
provided to the commissioner and the former mutual and the reports
or summary reports shall be mailed at least annually to the
beneficiaries of the trust at the expense of the trust.
(e) An interest in a trust established under this section does not
constitute a security under Indiana law.
(f) The establishment of a trust or pendency of any claim
described in this chapter shall not delay or affect the effectiveness of
a plan of conversion or an amendment to the articles of
incorporation.
As added by P.L.94-1999, SEC.3.