2006 Code of Virginia § 38.2-1005.1 - Conversion of a domestic mutual insurer to a domestic stock insurer

38.2-1005.1. Conversion of a domestic mutual insurer to a domestic stockinsurer.

A. Any domestic mutual insurer may convert to a domestic stock insurerpursuant to a plan of conversion approved by the Commission.

B. The Commission shall approve any such plan of conversion if, after givingnotice and an opportunity to be heard to the policyholders of the domesticmutual insurer, the Commission determines that:

1. The terms and conditions of the plan are fair and equitable to thepolicyholders of the domestic mutual insurer;

2. The plan is subject to approval by a vote of more than two-thirds of allvotes cast on the plan at a meeting of the members of the domestic mutualinsurer called for that purpose at which a quorum is present;

3. Except as otherwise provided in subdivision 4 of this subsection, the planallocates and directs that the entire stock ownership interests and otherconsideration to be distributed pursuant to the plan of conversion bedistributed to the policyholders of the domestic mutual insurer;

4. In the case of a domestic mutual insurer that converted from a healthservices plan that was in existence prior to December 31, 1987, the plan ofconversion allocates and distributes to the State Treasurer, in addition toany shares of stock that the Commonwealth may be entitled to receive as apolicyholder, shares of stock or cash or both with a value equal to thesurplus, computed in accordance with generally accepted accountingprinciples, of such health services plan on December 31, 1987, plus tenmillion dollars; and

5. Immediately after the conversion, the insurer will have the fully paidcapital stock and surplus required by applicable law.

C. A plan of conversion that utilizes a statutory merger in order to effect aconversion may be approved in accordance with this section and 38.2-1005.1:9, and the provisions of 38.2-1018 shall not be applicable tosuch plan of conversion.

(1996, cc. 801, 831; 2001, c. 726.)