US Laws, Codes, Statutes & Cases

                                  TITLE  41
                                  INSURANCE
                                  CHAPTER 28
                    ORGANIZATION AND CORPORATE PROCEDURES
                         OF STOCK AND MUTUAL INSURERS
    41-2858.  BULK REINSURANCE -- MUTUAL INSURERS. (1) A domestic mutual
insurer may reinsure all or substantially all of its business in force, or all
or substantially all of a major class thereof, with another insurer, stock or
mutual, by an agreement of bulk reinsurance after compliance with this
section. No such agreement shall become effective unless filed with the
director and approved by him in writing.
    (2)  The director shall approve such agreement within a reasonable time
after filing if he finds it to be fair and equitable to each domestic insurer
involved, and that such reinsurance if effectuated would not substantially
reduce the protection or service to its policyholders. If the director does
not so approve, he shall so notify each insurer involved in writing specifying
his reasons therefor.
    (3)  If for reinsurance of all or substantially all of its business in
force, the plan and agreement for such reinsurance must be approved by vote of
not less than two-thirds (2/3) of each domestic mutual insurer's members
voting thereon at meetings of members called for the purpose, pursuant to such
reasonable notice and procedure as the director may approve. If a life
insurer, right to vote may be limited to members whose policies are other than
term or group policies, and have been in effect for more than one (1) year.
    (4)  If for reinsurance in a stock insurer of all or substantially all of
the insurance in force of a mutual insurer, the agreement must provide for
payment in cash to each member of the insurer entitled thereto of his equity,
if any, in the business reinsured as determined under a fair formula approved
by the director, as based upon the reserves, assets (whether or not "admitted"
assets) and surplus, if any, of the mutual insurer to be taken over by the
stock insurer.
    (5)  No director, officer, agent or employee of any insurer party to such
reinsurance, 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 reinsurance agreement.