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304.24-360 Mutualization of stock insurer.
(1)
(2)
(3)
A stock insurer may become a mutual insurer under such reasonable plan and
procedure as may be approved by the commissioner after a hearing thereon.
The commissioner shall not approve any such plan or procedure of
mutualization unless:
(a) The commissioner finds that it is equitable to stockholders and
policyholders;
(b) It is subject to approval by the holders of not less than three-fourths (3/4)
of the insurer's outstanding capital stock having voting rights, and by not
less than two-thirds (2/3) of the insurer's policyholders, who vote on such
plan in person, by proxy, or by mail, pursuant to such reasonable notice
and procedure as may be approved by the commissioner;
(c) If a life insurer, the right to vote thereon is limited to holders of policies,
other than term or group policies, 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 dissenting
stockholder in the same manner and subject to the same applicable
conditions as provided by KRS Chapter 271B as to rights of dissenting
stockholders with respect to merger or consolidation of business
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.
This section shall not apply to mutualization under order of court pursuant to
rehabilitation or reorganization of an insurer under Subtitle 33 of this chapter.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1341, effective July 15, 2010. -Amended 1972 Ky. Acts ch. 274, sec. 163, effective July 1, 1972. -- Created
1970 Ky. Acts ch. 301, subtit. 24, sec. 36, effective June 18, 1970.
Legislative Research Commission Note. As of January 1, 1989, KRS Ch. 271A
becomes KRS Ch. 271B. Therefore, the reference in subdivision (2)(e) of this
section to KRS Ch. 271A has been changed to KRS Ch. 271B.
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