2005 Idaho Code - 41-2856 — MERGERS AND CONSOLIDATIONS OF STOCK INSURERS

                                  TITLE  41
                                  INSURANCE
                                  CHAPTER 28
                    ORGANIZATION AND CORPORATE PROCEDURES
                         OF STOCK AND MUTUAL INSURERS
    41-2856.  MERGERS AND CONSOLIDATIONS OF STOCK INSURERS. (1) A domestic
stock insurer may merge or consolidate with one or more domestic or foreign
stock insurers, or ordinary business corporations having as their principal
assets, cash or assets of a character allowed by investment by domestic
insurers pursuant to the provisions of chapter 7, title 41, Idaho Code,
provided the surviving corporation shall be a domestic or foreign stock
insurer, by complying with the applicable provisions of the statutes of this
state governing the merger or consolidation of stock corporations formed for
profit, but subject to subsections (2), (3) and (4) below.
    (2)  The agreement and plan of merger may provide for the restatement of
the capital and surplus accounts of the surviving corporation, constituting
all surplus in excess of stated capital, borrowed surplus and allowance for
non-admitted assets, if any, as unassigned surplus, thereby increasing or
decreasing the stated capital or gross paid in and contributed surplus
accounts of the constituent corporations and providing additional surplus in
any forms specified in the agreement and plan of merger; provided any
reorganization of capital or surplus account must be indicated on the annual
financial statement.
    (3)  No such merger or consolidation shall be effectuated unless in
advance thereof the plan and agreement therefor have been filed with the
director and approved in writing by him after a hearing thereon after notice
to the stockholders of each insurer involved. The director shall give such
approval within a reasonable time after such filing unless he finds such plan
or agreement:
    (a)  Is contrary to law; or
    (b)  Inequitable to the stockholders of any insurer involved; or
    (c)  Would substantially reduce the security of and service to be rendered
to policyholders of the domestic insurer in this state or elsewhere; or
    (d)  Is subject to other material and reasonable objections.
    (4)  No director, officer, agent or employee of any insurer party to such
merger or consolidation shall receive any fee, commission, compensation or
other valuable consideration whatsoever for in any manner aiding, promoting or
assisting therein except as set forth in such plan or agreement.
    (5)  If the director does not approve any such plan or agreement he shall
so notify the insurer in writing specifying his reasons therefor.
    (6)  Any plan or proposal through which a stock insurer proposes to
acquire a controlling stock interest in another stock insurer through an
exchange of stock of the first insurer, issued by the insurer for the purpose,
for such controlling stock of the second insurer is deemed to be a plan or
proposal of merger of the second insurer into the first insurer for the
purposes of this section and is subject to the applicable provisions hereof.
    (7)  Reinsurance of all or substantially all of the insurance in force of
an insurer by another insurer, shall also be subject to the provisions of this
section as if a merger.