US Laws, Codes, Statutes & Cases

                                  TITLE  41
                                  INSURANCE
                                  CHAPTER 28
                    ORGANIZATION AND CORPORATE PROCEDURES
                         OF STOCK AND MUTUAL INSURERS
    41-2854.  MUTUALIZATION OF STOCK INSURERS. (1) A stock insurer other than
a title insurer may become a mutual insurer under such plan and procedure as
may be approved by the director after a hearing thereon.
    (2)  The director shall not approve any such plan, procedure or
mutualization unless:
    (a)  It is equitable to stockholders and policyholders;
    (b)  It is subject to approval by the holders of not less than a majority
of the insurer's outstanding capital stock having voting rights, and by not
less than a majority of the insurer's policyholders who vote on such plan in
person, by proxy or by mail pursuant to such notice and procedure as may be
approved by the director;
    (c)  If a life insurer, the right to vote thereon is limited to holders of
policies other than term or group policies, and whose policies have been in
force for more than one (1) year;
    (d)  Mutualization will result in retirement of shares of the insurer's
capital stock at a price not in excess of the fair market value thereof as
determined by competent disinterested appraisers;
    (e)  The plan provides for the purchase of the shares of any nonconsenting
stockholder in the same manner and subject to the same applicable conditions
as provided by the general corporation law of the state as to rights of
nonconsenting stockholders, with respect to consolidation or merger of private
corporations;
    (f)  The plan provides for definite conditions to be fulfilled by a
designated early date upon which such mutualization will be deemed effective;
and
    (g)  The mutualization leaves the insurer with surplus funds reasonably
adequate for the security of its policyholders and to enable it to continue
successfully in business in the states in which it is then authorized to
transact insurance, and for the kinds of insurance included in its
certificates of authority in such states.
    (3)  No director, officer, agent or employee of the insurer, nor any other
person, shall receive any fee, commission or other valuable consideration
whatsoever for in any manner aiding, promoting, or assisting therein except as
set forth in the plan of mutualization as approved by the director.
    (4)  This section shall not apply to mutualization under order of court
pursuant to rehabilitation or reorganization of an insurer under chapter 33.