40-505. Suspension of business.

40-505

Chapter 40.--INSURANCE
Article 5.--MUTUAL LIFE INSURANCE COMPANIES

      40-505.   Suspension of business.Whenever the directors of any mutual life insurance company organizedunder the laws of this state shall deem it to the best interest of thepolicyholders to suspend business, it may secure propositions from othersolvent life insurance companies authorized to do business in this state,whether foreign or domestic, and whether companies possessing a capitalstock or organized on the mutual plan, to reinsure its policies. That uponsecuring such proposition or propositions, the same shall be formulated andthe substance transmitted by mail to each policyholder, and a regular orspecial meeting of the policyholders shall be called for the purpose ofdetermining whether said company shall go into liquidation, and also ofvoting upon said proposition of reinsurance. If at such meeting two thirdsof the number of the holders of outstanding policies of such company shallvote, either in person or by proxy, to go into liquidation and to acceptany one of said propositions for reinsurance, the board of directors maymake a contract in accordance therewith, and upon due execution thereoftransfer and turn over to the said reinsuring corporation so much of theassets of such mutual life insurance company as are embraced in saidproposal or contract as consideration therefor: Provided, That anydissenting policyholder may withdraw his equitable share of the assets ofsuch company in lieu of accepting such reinsurance contract: Provided,That nothing in this act shall be construed as legalizing any attemptedreinsurance or transfer heretofore made by any such company.

      History:   L. 1927, ch. 231, 40-505; June 1.