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2021 Tennessee Code
Title 56 - Insurance
Chapter 18 - Mutual Life Insurance Companies
§ 56-18-108. Conversion of Stock Life Insurance Company Into Mutual — Authority to Convert — Requirements
Universal Citation: TN Code § 56-18-108 (2021)
- Any domestic stock life insurance corporation, duly incorporated under the laws of this state, may become a mutual life insurance corporation, and to that end may carry out a plan for the acquisition of shares of its capital stock; provided, that the plan has been:
- Adopted by a vote of a majority of the directors of the corporation;
- Submitted to the commissioner and has been approved by the commissioner in writing as conforming to this chapter and not prejudicial to policyholders;
- Approved by a vote of stockholders representing a majority of the capital stock then outstanding; and
- Approved by a majority of the policyholders, as defined in this chapter, voting at a meeting called for the purpose, the majority required being a majority of those policyholders who vote at the meeting, and not a majority of all the policyholders.
- As used in this chapter:
- “Commissioner” means the commissioner of commerce and insurance;
- “Domestic stock life insurance corporation” means a corporation organized and doing business under the laws of this state, with its principal office or place of business located within the state, having an authorized capital stock, and shares of capital stock, and engaged in writing life insurance or life, health and accident insurance, either separately or in combined policies; and
- “Mutual life insurance corporation” means a corporation organized and doing business under the laws of this state, upon the principle of a mutual participation in the profits, with its principal office or place of business located within the state, without capital stock or shares of capital stock, engaged in the writing of life insurance or life, health and accident insurance, either separately or in combined policies.
- If, at the time of any election called for the purpose of approving or disapproving a plan of mutualization or called for any purpose after a plan of mutualization is approved or adopted or completed, an insured is below fifteen (15) years of age, then the insured's parent or other legal guardian, upon proper affidavit, may cast the insured's vote. An insured fifteen (15) years of age or older may cast the person's own vote.
- In the case of any individual policy or contract insuring two (2) or more persons jointly, the persons insured shall be deemed one (1) policyholder, within the meaning of this section. In the case of any group life or group annuity policy or contract, the employer or other person, firm, corporation or association to whom or in whose name the master policy has been issued and held shall be deemed one (1) policyholder, within the meaning of this section.
- In case the policy or contract has been assigned by a bona fide assignment absolute on its face to an assignee other than the corporation, and the assignment has been filed at the home office of the corporation at least thirty (30) days prior to the date of any meeting called for the purpose of approving or disapproving a plan of mutualization, then the assignee shall be deemed a policyholder, insofar as the person's interest may appear, for the purpose of voting on the plan of mutualization; provided, that the policy is of the type and size required by § 56-18-110(b). Except as provided in this section, an assignee of a policy or contract shall not be deemed to be a policyholder within the meaning of this section.
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