senate Bill S4191B

Signed by Governor

Provides for the formation of mutual holding companies by certain domestic mutual life insurers, and the reorganization of such life insurers into domestic stock life insurers

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed by Governor
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actions

  • 13 / Mar / 2013
    • REFERRED TO INSURANCE
  • 18 / Mar / 2013
    • 1ST REPORT CAL.208
  • 19 / Mar / 2013
    • 2ND REPORT CAL.
  • 20 / Mar / 2013
    • ADVANCED TO THIRD READING
  • 29 / May / 2013
    • AMENDED ON THIRD READING 4191A
  • 03 / Jun / 2013
    • AMENDED ON THIRD READING 4191B
  • 10 / Jun / 2013
    • PASSED SENATE
  • 10 / Jun / 2013
    • DELIVERED TO ASSEMBLY
  • 10 / Jun / 2013
    • REFERRED TO CODES
  • 18 / Jun / 2013
    • SUBSTITUTED FOR A6448B
  • 18 / Jun / 2013
    • ORDERED TO THIRD READING RULES CAL.329
  • 18 / Jun / 2013
    • PASSED ASSEMBLY
  • 18 / Jun / 2013
    • RETURNED TO SENATE
  • 01 / Nov / 2013
    • DELIVERED TO GOVERNOR
  • 13 / Nov / 2013
    • SIGNED CHAP.500

Summary

Provides for the formation of mutual holding companies by certain domestic mutual life insurers, and the reorganization of such life insurers into domestic stock life insurers.

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Bill Details

See Assembly Version of this Bill:
A6448B
Versions:
S4191
S4191A
S4191B
Legislative Cycle:
2013-2014
Law Section:
Insurance Law
Laws Affected:
Add Art 80 ยงยง8001 - 8021, Ins L

Sponsor Memo

BILL NUMBER:S4191B

TITLE OF BILL: An act to amend the insurance law, in relation to the
formation of mutual holding companies by certain domestic mutual life
insurers and the reorganization in connection therewith of a domestic
mutual life insurer into a domestic stock life insurer

PURPOSE OF BILL:

This bill would authorize a domestic mutual life insurer with admitted
assets of less than $10 billion to reorganize into a domestic stock life
insurer through the formation of a new mutual holding company which
owns, directly or through one or more stock holding companies, at least
51% of the reorganized mutual life insurer.

SUMMARY OF SPECIFIC PROVISIONS:

Adds a new Article 80 to the Insurance Law providing for the reorganiza-
tion of a domestic mutual life insurer with admitted assets of less than
$10 billion into a domestic stock life insurer through the formation of
a new mutual holding company which owns, directly or through one or more
stock holding companies, at least 51% of the reorganized mutual life
insurer. The new Article 80 specifies in great detail: 1) The process
for reorganization and required contents of the plan of reorganization;
2) obligations to policyholders; 3) application and review by the super-
intendent of financial services including the holding of a public hear-
ing; 4) the process for policyholder review and voting on a reorganiza-
tion plan; 5) restrictions on compensation received by officers,
directors and employees of the reorganized company; 6) requirements on
board members of the mutual holding company and any stock holding compa-
ny, including a requirement for outside directors of each, and annual
filings to be made by the mutual holding company with the superintendent
if required by the superintendent; 7) limitations on stock options and
stock awards to officers and directors of the mutual holding company,
stock holding company and the reorganized insurer; 8) limitations on
ownership of voting stock of the reorganized insurer by officers and
directors of the mutual holding company, stock holding company and the
reorganized insurer; and 9) many other matters related to the regu-
lation, powers and duties of a reorganized mutual holding company.

Section two sets out the effective date.

JUSTIFICATION:

Similar statutes allowing for insurance mutual holding companies have
been enacted into law in 32 states and the District of Columbia. At
least 30 mutual life insurance companies in the United States have
converted to a mutual holding company structure. New York domestic mutu-
al life insurers are at a competitive disadvantage because they do not
have the authority to reorganize in the same manner. In New York State,
there are a number of upstate companies, each with admitted assets of
less than $10 billion, that could enhance the interests of policyholders

by availing themselves of this proposed law and, as a result, being able
to raise capital or merge with other mutual holding companies, thereby
contributing to the growth of New York's upstate economy.

As a major part of the financial services industry, life insurers today
face the same competitive pressures and capital needs that are linked to
any mergers, consolidations and capital-raising activities occurring
throughout the financial services arena. Within the life insurance
industry itself, insurers must enhance and strengthen capital, liquidity
and profitability in order to hold their own against intense competi-
tion. The insurance-buying public looks carefully at financial ratings
and capital base. As a consequence, more than ever before, access to
capital is critical. However, one segment of the life insurance industry
- mutual life insurers - has a decided disadvantage compared to stock
life insurers in accessing capital markets. Since mutual insurers cannot
issue stock, they do not have the array of methods for accessing capital
markets that their stock insurer counterparts do. Additionally, mutual
insurers are limited in their ability to consolidate and grow through
acquisitions because other companies can only be acquired as subsid-
iaries of the mutual life insurer, and this structure limits the size of
acquisitions because subsidiaries are subject to a 30%- risk-based-capi-
tal factor, statutory accounting requires write - off of the good will
element of the purchase price, and legal investment laws may limit the
amount an insurer may invest in subsidiaries. Therefore, this law would
enhance the ability of life insurers to consolidate and grow through
acquisitions.

One of the few alternatives for a mutual life insurer is to convert to a
stock form of ownership in a process called demutualization. Demutuali-
zation (or conversion) of New York domestic mutual life insurers is
currently authorized pursuant to Insurance Law Section 7312. However,
proceeding directly with demutualization is a major undertaking involv-
ing complexity and uncertainty. The feasibility of raising capital
through demutualization can be hampered by stock market conditions,
which can be volatile and uncertain, and by strains on the profitability
of the insurance business. Conversion to the stock form opens a mutual
life insurer to the possibility of hostile acquisition by a foreign
management - presenting uncertainty and instability which may make life
policyholders uncomfortable. There are therefore a number of mutual
life insurers for which demutualization may not be an attractive alter-
native, but which still have a need to raise capital to support their
business.

This bill would authorize a domestic mutual life insurer with admitted
assets of less than $10 billion to reorganize into a domestic stock life
insurer through the formation of a new mutual holding company which
owns, directly or through one or more stock holding companies, at least
51% of the reorganized mutual life insurer. The new organization could
permit capital raising by selling voting stock of the reorganized insur-
er or one or more stock holding companies to persons other than the
mutual holding company, and the issuer of such voting stock contributing
all or a portion of the proceeds down to its stock life insurer subsid-

iary. Such a reorganization would not affect the obligations of the
reorganizing insurer. All insurance obligations of the reorganizing
insurer stay intact. Policyholders/members would retain membership,
voting rights and rights to participate in any distribution of surplus,
but such rights in the insurer become instead rights in the mutual hold-
ing company. Policyholders/members would continue to control the reor-
ganized insurer through their new membership interests in the mutual
holding company, the directors of which are elected by the members.
Policyholders then have the ability to protect and strengthen their
financial position by raising new capital through a controlled subsid-
iary. Such a structure has been successfully employed by mutual savings
banks in New York under Article VI-C of the Banking Law (enacted in
1989) and by thrifts since the late 1980s in many other states.

The bill contains a number of provisions that protect the interests of
policyholders of the reorganizing insurer.

Dividend Practices. To further protect the dividend expectations of
participating policyholders, the bill requires that the reorganized
insurer, on or before the date on which less than 75% of the votes
eligible to be cast by the mutual holding company's members are held by
owners of the reorganized insurer's participating policies or contracts,
either (a) establish a "closed block" to which would be allocated assets
in an amount sufficient, with anticipated revenue, to support the mutual
life insurer's individual, dividend-paying participating business,
including continuation of current dividend scales if the experience
under the scales continues, or (b) provide as to its participating indi-
vidual policies in a manner approved by the superintendent.

Reorganization Procedural Safeguards. The reorganization of a domestic
mutual life insurer through the formation of a mutual holding company
would be subject to the procedural safeguards applicable to life insurer
demutalization under current law, including board approval, a public
hearing, the superintendent's approval and approval by eligible policy-
holders.

Required Outside Directors of Mutual Holding Company and Stock Holding
Company and Limitations on their Ownership Interests in the Reorganized
Insurer. The bill provides that (a) at least two-thirds of the directors
of the mutual holding company and of any stock holding company, all of
the members of the compensation committee of the board of directors of
the mutual holding company and of any stock holding company, at least
two-thirds of the members of any committee responsible for making deci-
sions affecting the capital structure or mergers and acquisitions, and a
majority of the directors on each other committee of the board of direc-
tors of the mutual holding company and any stock holding company must be
outside directors; and (b) the aggregate percentage of voting securities
of the reorganized insurer directly or indirectly owned, controlled or
held with the power to vote, either personally or by persons (other than
the mutual holding company and any stock holding company) of which they
are directors, officers or employees, by outside directors, may not
exceed three percent or such lesser percentage as may be determined by

the superintendent in his approval of the mutual holding company's plan
of reorganization.

Supermajority of Directors of Mutual Holding Company and Stock Holding
Company required in Certain Instances. The bill requires that the
by-laws of the mutual holding company and any stock holding company
provide that the affirmative vote of at least two-thirds of the board of
directors of such company be required for any action by such company to
(a) adopt a plan of conversion of the mutual holding company, (b) enter
into a merger with the mutual holding company, or (c) conduct a public
offering or authorize the issuance of any voting stock or security
convertible into voting stock of the reorganized insurer or the stock
holding company to any person other than the mutual holding company or
the stock holding company.

Limitations of Management Stock Options and Stock Awards. The bill
provides that, subject to a limited exception, until six months after
the completion of either an initial public offering or the first issu-
ance of voting stock or securities convertible into voting stock of the
reorganized insurer or the stock holding company to any person other
than the mutual holding company or the stock holding company, neither
the stock holding company nor the reorganized insurer may award any
stock options or stock grants to persons who are officers or directors
of the mutual holding company, the stock holding company or the reorgan-
ized insurer.

Aggregate Limitations on Management Ownership of Voting Stock. The bill
provides that, until two years after the six month period after the
completion of either an initial public offering or the first issuance of
voting stock or securities convertible into voting stock of the reorgan-
ized insurer or the stock holding company to any person other than the
mutual holding company or the stock holding company, the officers and
directors of the mutual holding company, a stock holding company and of
the reorganized insurer may not own beneficially, in the aggregate, more
than five percent of the voting stock of the reorganized insurer.

Superintendent to Approve Valuation of Stock Offering Prior to Initial
Public Offering. The bill provides that any issuance of voting stock or
securities convertible into voting stock of the reorganized insurer or
the stock holding company prior to an initial public offering, private
equity placement, or the issuance of public or private voting stock or
securities convertible into voting stock of the reorganized insurer or
stock holding company or any other type of capital raised must be
approved by the superintendent as to the proposed valuation of such
stock or securities.

Limitations on Accumulation of Surplus of a Mutual Holding Company. The
bill provides limitations of the amount of "non-insurance surplus" and
"aggregate capital and surplus" that may be maintained by a mutual hold-
ing company. The superintendent may permit the mutual holding company to
exceed these limits for a period not exceeding one year.

Superintendent Approval Required of Mutual Holding Company Merger,
Consolidation and Other Reorganization. Recognizing that the reorganiza-
tion of a domestic mutual life insurer through the formation of a mutual
holding company and its stock life insurer subsidiary is, in effect, the
continuance of the existence of the mutual life insurer in another form.
The bill would allow a mutual holding company to engage in mergers,
consolidations and other reorganizations subject to the superintendent's
approval.

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

Immediately.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 4191--B
    Cal. No. 208

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                             March 13, 2013
                               ___________

Introduced  by  Sens. LIBOUS, VALESKY -- read twice and ordered printed,
  and when printed to be committed to  the  Committee  on  Insurance  --
  reported  favorably  from  said committee, ordered to first and second
  report, ordered to a third reading,  amended  and  ordered  reprinted,
  retaining its place in the order of third reading -- again amended and
  ordered reprinted, retaining its place in the order of third reading

AN ACT to amend the insurance law, in relation to the formation of mutu-
  al  holding companies by certain domestic mutual life insurers and the
  reorganization in connection  therewith  of  a  domestic  mutual  life
  insurer into a domestic stock life insurer

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The insurance  law is amended by adding a new article 80 to
read as follows:

                               ARTICLE 80
                         MUTUAL HOLDING COMPANY
SECTION 8001. DEFINITIONS.
        8002. REORGANIZATION OF MUTUAL LIFE INSURER THROUGH FORMATION OF
                A MUTUAL HOLDING COMPANY; CONTENTS OF PLAN.
        8003. DIVIDEND PRACTICES.
        8004. ADOPTION OF PLAN; SUBMISSION OF PLAN  TO  THE  SUPERINTEN-
                DENT.
        8005. AMENDMENT OR WITHDRAWAL OF PLAN.
        8006. CONSULTANTS.
        8007. APPROVAL OF PLAN BY SUPERINTENDENT; HEARING.
        8008. APPROVAL OF PLAN BY POLICYHOLDERS.
        8009. FILING OF PLAN; EFFECTIVE DATE OF REORGANIZATION.
        8010. EFFECT OF REORGANIZATION.
        8011. CORPORATE EXISTENCE.
        8012. DIRECTORS AND OFFICERS.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09843-04-3

S. 4191--B                          2

        8013. NOTICE OF PROPOSED REORGANIZATION.
        8014. FAILURE TO GIVE NOTICE.
        8015. LIMITATIONS OF ACTIONS; SECURITY.
        8016. PROHIBITED TRANSACTIONS BY OFFICERS, DIRECTORS AND EMPLOY-
                EES.
        8017. REQUIREMENTS APPLICABLE TO A MUTUAL HOLDING COMPANY.
        8018. OTHER  REQUIREMENTS  APPLICABLE TO A STOCK HOLDING COMPANY
                AND A MUTUAL HOLDING COMPANY.
        8019. CONVERSION OF MUTUAL HOLDING COMPANY.
        8020. TRANSFERS OF SUBSIDIARIES.
        8021. LIMITATIONS ON ACCUMULATION OF SURPLUS OF  MUTUAL  HOLDING
                COMPANIES.
  S  8001. DEFINITIONS.  AS  USED  IN  THIS ARTICLE, THE FOLLOWING TERMS
SHALL HAVE THE FOLLOWING MEANINGS:
  (A) "ADOPTION DATE" MEANS THE DATE THE BOARD OF DIRECTORS OF THE MUTU-
AL LIFE INSURER ADOPTS THE PLAN OF REORGANIZATION.
  (B) "BENEFICIAL OWNERSHIP" WITH RESPECT TO  ANY  SECURITY,  MEANS  THE
SOLE  OR  SHARED  POWER  TO  VOTE OR DIRECT THE VOTING OF, SUCH SECURITY
AND/OR THE SOLE OR SHARED POWER TO DISPOSE OR DIRECT THE DISPOSITION  OF
SUCH SECURITY.
  (C)  "EFFECTIVE  DATE"  MEANS,  IN THE CASE OF THE REORGANIZATION OF A
MUTUAL LIFE INSURER, THE DATE UPON WHICH THE REORGANIZATION OF THE MUTU-
AL LIFE INSURER SHALL BE EFFECTIVE  IN  ACCORDANCE  WITH  SECTION  EIGHT
THOUSAND  NINE OF THIS ARTICLE AS A RESULT OF REORGANIZATION PROCEEDINGS
PURSUANT TO THIS ARTICLE.
  (D) "MEMBER" WITH REFERENCE TO A MUTUAL LIFE INSURER, MEANS  A  PERSON
WHO,  BY  THE  RECORDS  OF  THE MUTUAL LIFE INSURER, IS DEEMED TO BE THE
"POLICYHOLDER" OF A POLICY OR  ANNUITY  CONTRACT  WHICH  IS  OF  A  TYPE
DESCRIBED  IN  PARAGRAPH  ONE, TWO OR THREE OF SUBSECTION (A) OF SECTION
ONE THOUSAND ONE HUNDRED THIRTEEN OF THIS CHAPTER FOR PURPOSES OF  PARA-
GRAPH  THREE  OF SUBSECTION (A) OF SECTION FOUR THOUSAND TWO HUNDRED TEN
OF THIS CHAPTER. ON AND AFTER THE EFFECTIVE DATE OF A PLAN  OF  REORGAN-
IZATION THAT CREATES A MUTUAL HOLDING COMPANY, THE TERM "MEMBER" MEANS A
MEMBER  OF  SUCH MUTUAL HOLDING COMPANY AS PROVIDED IN SUBSECTION (C) OF
SECTION EIGHT THOUSAND SEVENTEEN OF THIS ARTICLE.
  (E) "MEMBERSHIP INTERESTS" MEANS, WITH  REFERENCE  TO  AN  INSTITUTION
THAT IS A MUTUAL LIFE INSURER OR A MUTUAL HOLDING COMPANY, THE RIGHTS AS
MEMBERS ARISING UNDER THE CHARTER OF SUCH INSTITUTION OR THIS CHAPTER OR
OTHERWISE  BY LAW INCLUDING THE RIGHTS TO VOTE AND TO PARTICIPATE IN ANY
DISTRIBUTION OF THE SURPLUS OF SUCH INSTITUTION, WHETHER OR NOT INCIDENT
TO A LIQUIDATION THEREOF.  THE  TERM  "MEMBERSHIP  INTERESTS"  DOES  NOT
INCLUDE RIGHTS EXPRESSLY CONFERRED UPON THE POLICYHOLDERS BY THEIR POLI-
CIES  OR  CONTRACTS  (INCLUDING THE RIGHT TO PARTICIPATE IN THE DISTRIB-
UTION OF SURPLUS) OTHER THAN THE RIGHT TO VOTE.
  (F) "MUTUAL HOLDING  COMPANY"  MEANS  A  CORPORATION  ORGANIZED  UNDER
SECTION EIGHT THOUSAND SEVENTEEN OF THIS ARTICLE.
  (G) "MUTUAL LIFE INSURER" MEANS A DOMESTIC MUTUAL LIFE INSURER.
  (H) "OFFER" INCLUDES EVERY OFFER TO BUY OR ACQUIRE, SOLICITATION OF AN
OFFER TO SELL, TENDER OFFER FOR, OR REQUEST OR INVITATION FOR TENDERS OF
A SECURITY OR INTEREST IN A SECURITY FOR VALUE.
  (I) "OUTSIDE DIRECTOR" MEANS A DIRECTOR:
  (1)  WHO IS NOT AN OFFICER, EMPLOYEE OR CONSULTANT OF THE MUTUAL HOLD-
ING COMPANY, ANY STOCK HOLDING COMPANY, THE REORGANIZED INSURER  OR  ANY
OTHER  SUBSIDIARY  OF  THE  MUTUAL  HOLDING COMPANY OR ANY STOCK HOLDING
COMPANY;

S. 4191--B                          3

  (2) WHO DOES NOT DIRECTLY OR  INDIRECTLY  OWN,  CONTROL  OR  HOLD  ONE
PERCENT  OR GREATER OF THE VOTING SECURITIES OF ANY STOCK HOLDING COMPA-
NY, THE REORGANIZED INSURER OR ANY OTHER SUBSIDIARY OF THE MUTUAL  HOLD-
ING COMPANY OR ANY STOCK HOLDING COMPANY; AND
  (3)  WHO  IS  NOT A DIRECTOR, OFFICER OR EMPLOYEE OF ANY PERSON EXCEPT
THE MUTUAL HOLDING COMPANY OR ANY STOCK HOLDING COMPANY THAT DIRECTLY OR
INDIRECTLY OWNS, CONTROLS OR HOLDS SUCH PERCENTAGE OF SUCH VOTING  SECU-
RITY.
  LESSER  AMOUNTS  OF  OWNERSHIP  OF  VOTING SECURITIES OTHER THAN THOSE
PROVIDED FOR IN THIS SUBSECTION MAY BE APPROVED BY THE SUPERINTENDENT AS
A COMPONENT OF THE  MUTUAL  HOLDING  COMPANY'S  PLAN  OF  REORGANIZATION
PURSUANT TO THIS ARTICLE.
  (J)  "PERSON"  MEANS  AN  INDIVIDUAL,  PARTNERSHIP, FIRM, ASSOCIATION,
CORPORATION, JOINT-STOCK COMPANY,  LIMITED  LIABILITY  COMPANY,  LIMITED
LIABILITY  PARTNERSHIP,  TRUST, GOVERNMENT OR GOVERNMENTAL AGENCY, STATE
OR POLITICAL SUBDIVISION THEREOF, PUBLIC OR PRIVATE CORPORATION,  BOARD,
ASSOCIATION,  ESTATE,  TRUSTEE  OR  FIDUCIARY, ANY SIMILAR ENTITY OR ANY
COMBINATION OF THE FOREGOING ACTING IN CONCERT.
  (K) "PLAN OF REORGANIZATION" OR "PLAN" MEANS A PLAN ADOPTED BY A MUTU-
AL LIFE INSURER IN COMPLIANCE WITH THIS ARTICLE.
  (L) "POLICYHOLDER" MEANS A PERSON, AS DETERMINED BY THE RECORDS OF THE
REORGANIZING INSURER OR REORGANIZED INSURER, WHO IS  DEEMED  TO  BE  THE
"POLICYHOLDER"  OF  A  POLICY  OR  ANNUITY  CONTRACT  WHICH IS OF A TYPE
DESCRIBED IN PARAGRAPH ONE, TWO OR THREE OF SUBSECTION  (A)  OF  SECTION
ONE  THOUSAND ONE HUNDRED THIRTEEN OF THIS CHAPTER FOR PURPOSES OF PARA-
GRAPH THREE OF SUBSECTION (A) OF SECTION FOUR THOUSAND TWO  HUNDRED  TEN
OF THIS CHAPTER.
  (M) "PUBLIC OFFERING" MEANS A STOCK OFFERING REQUIRED TO BE REGISTERED
PURSUANT  TO  THE  SECURITIES ACT OF 1933, UNITED STATES CODE, TITLE 15,
SECTION 77E.
  (N) "REORGANIZED INSURER" MEANS THE STOCK LIFE INSURER  INTO  WHICH  A
MUTUAL  LIFE  INSURER  HAS  BEEN  REORGANIZED  IN  ACCORDANCE  WITH  THE
PROVISIONS OF THIS ARTICLE.
  (O) "REORGANIZING INSURER" MEANS, IN THE CASE OF A PLAN OF REORGANIZA-
TION OF A MUTUAL LIFE INSURER UNDER THIS ARTICLE, THE MUTUAL LIFE INSUR-
ER THAT IS REORGANIZING PURSUANT TO SUCH PLAN.
  (P) "STOCK HOLDING COMPANY" MEANS A CORPORATION INCORPORATED UNDER THE
LAWS OF ANY JURISDICTION  IN  THE  UNITED  STATES,  AT  LEAST  FIFTY-ONE
PERCENT  OF  THE  VOTING  STOCK  OF  WHICH IS OWNED, DIRECTLY OR THROUGH
ANOTHER STOCK HOLDING COMPANY, BY A MUTUAL  HOLDING  COMPANY  AND  WHICH
HOLDS,  DIRECTLY OR INDIRECTLY, VOTING STOCK IN AT LEAST ONE REORGANIZED
INSURER.
  (Q) "VOTING SECURITY" INCLUDES VOTING SECURITIES AS DEFINED  IN  PARA-
GRAPH  FORTY-FIVE OF SUBSECTION (A) OF SECTION ONE HUNDRED SEVEN OF THIS
CHAPTER,  ANY  REORGANIZATION  CERTIFICATE  OR  SUBSCRIPTION  (INCLUDING
SUBSCRIPTION RIGHTS ISSUED PURSUANT TO A PLAN OF REORGANIZATION), OR ANY
SECURITY CONVERTIBLE (WITH OR WITHOUT CONSIDERATION) INTO ANY SUCH SECU-
RITY,  OR CARRYING ANY WARRANT OR RIGHT TO SUBSCRIBE FOR OR PURCHASE ANY
SUCH SECURITY, OR ANY SUCH WARRANT OR RIGHT.
  (R) "VOTING STOCK" MEANS CAPITAL STOCK THAT CONSTITUTES VOTING SECURI-
TIES AS DEFINED IN PARAGRAPH FORTY-FIVE OF SUBSECTION (A) OF SECTION ONE
HUNDRED SEVEN OF THIS CHAPTER. ALL REFERENCES IN THIS ARTICLE TO A SPEC-
IFIED PERCENTAGE OF THE VOTING STOCK OF ANY PERSON SHALL MEAN SECURITIES
HAVING THE SPECIFIED PERCENTAGE OF THE VOTING POWER IN SUCH  PERSON  FOR
THE  ELECTION  OF DIRECTORS, TRUSTEES OR MANAGEMENT OF SUCH PERSON OTHER

S. 4191--B                          4

THAN SECURITIES HAVING SUCH POWER ONLY BY REASON OF THE HAPPENING  OF  A
CONTINGENCY.
  S  8002.  REORGANIZATION OF MUTUAL LIFE INSURER THROUGH FORMATION OF A
MUTUAL HOLDING COMPANY; CONTENTS OF PLAN.  (A)  A  MUTUAL  LIFE  INSURER
HAVING  ON  THE  ADOPTION  DATE ADMITTED ASSETS OF LESS THAN TEN BILLION
DOLLARS MAY BE REORGANIZED AS A DOMESTIC STOCK LIFE INSURER WITH A MUTU-
AL HOLDING COMPANY BY COMPLYING WITH THE REQUIREMENTS OF THIS ARTICLE.
  (B) THE PLAN OF REORGANIZATION SHALL CONTAIN PROVISIONS FOR:
  (1) THE REORGANIZING INSURER BECOMING A DOMESTIC STOCK LIFE INSURER;
  (2) THE FORMATION OF A MUTUAL HOLDING COMPANY;
  (3) THE MEMBERS OF THE REORGANIZING INSURER BECOMING  MEMBERS  OF  THE
MUTUAL  HOLDING  COMPANY  WITH  MEMBERSHIP  INTERESTS  THEREIN,  AND THE
MEMBERSHIP INTERESTS IN THE REORGANIZING INSURER BEING EXTINGUISHED; AND
  (4) AT LEAST FIFTY-ONE PERCENT OF THE VOTING STOCK ISSUED BY THE REOR-
GANIZED INSURER BEING ACQUIRED AND HELD, DIRECTLY OR THROUGH ONE OR MORE
STOCK HOLDING COMPANIES, BY THE MUTUAL HOLDING COMPANY.
  (5) THE GENERAL TERMS FOR THE ESTABLISHMENT OF THE CLOSED BLOCK OR  AN
ALTERNATIVE  PROVISION  UNDER  SUBSECTION  (B) OF SECTION EIGHT THOUSAND
THREE OF THIS ARTICLE AND THE PROPOSED DIVIDEND POLICY UNDER  SUBSECTION
(A) OF SECTION EIGHT THOUSAND THREE OF THIS ARTICLE; AND
  (6)  A  PLAN OF OPERATION FOR THE REORGANIZED INSURER INCLUDING FINAN-
CIAL PROJECTIONS FOR A THREE-YEAR PERIOD AND A STATEMENT INDICATING  ITS
INTENTIONS WITH REGARD TO ISSUING ANY NONPARTICIPATING BUSINESS.
  (C)  THE  PLAN OF REORGANIZATION SHALL PROVIDE THAT THE REORGANIZATION
WILL NOT CHANGE PREMIUMS OR REDUCE POLICY BENEFITS, VALUES OR GUARANTEES
OR OTHER POLICY OBLIGATIONS OF THE MUTUAL LIFE  INSURER,  PROVIDED  THAT
THE PLAN OF REORGANIZATION MAY PROVIDE THAT THE REORGANIZED INSURER WILL
BE  ABLE TO MAKE SUCH CHANGES AND REDUCTIONS AS WOULD BE PERMITTED UNDER
THIS CHAPTER IF THE MUTUAL LIFE INSURER WERE NOT A REORGANIZING  INSURER
UNDER THIS ARTICLE.
  (D)  THE PLAN MAY PROVIDE FOR THE FORMATION OF ONE OR MORE STOCK HOLD-
ING COMPANIES.
  (E) THE PLAN SHALL INCLUDE THE FOLLOWING AS EXHIBITS:
  (1) THE PROPOSED CHARTERS OR  CERTIFICATES  OF  INCORPORATION  OF  THE
REORGANIZED  INSURER,  THE  MUTUAL HOLDING COMPANY AND ANY STOCK HOLDING
COMPANY OR COMPANIES; AND
  (2) THE PROPOSED BY-LAWS OF THE REORGANIZED INSURER, THE MUTUAL  HOLD-
ING COMPANY AND ANY STOCK HOLDING COMPANY OR COMPANIES.
  S  8003.  DIVIDEND  PRACTICES. (A) FOLLOWING THE EFFECTIVE DATE OF THE
PLAN, THE REORGANIZED INSURER MAY, WITH  RESPECT  TO  ITS  PARTICIPATING
INDIVIDUAL POLICIES AND CONTRACTS, EITHER:
  (1) CONTINUE THE DIVIDEND PRACTICES OF THE REORGANIZING INSURER;
  (2)  CONTINUE  THE  DIVIDEND PRACTICES OF THE REORGANIZING INSURER AND
ADOPT SUCH OTHER DIVIDEND PRACTICES AS, AT THE EFFECTIVE DATE OR AT  ANY
TIME  THEREAFTER, MAY BE PERMITTED UNDER APPLICABLE LAW OR REGULATION OR
APPROVED BY THE SUPERINTENDENT; OR
  (3) ADOPT SUCH OTHER ALTERNATIVE WITH RESPECT TO DIVIDEND PRACTICES AS
THE SUPERINTENDENT MAY APPROVE.
  (B) FOLLOWING THE EFFECTIVE DATE OF THE PLAN, THE REORGANIZED  INSURER
SHALL,  ON OR BEFORE THE DATE ON WHICH THE MUTUAL HOLDING COMPANY HOLDS,
DIRECTLY OR INDIRECTLY THROUGH ONE OR MORE STOCK HOLDING COMPANIES, LESS
THAN SEVENTY-FIVE PERCENT OF THE ISSUED AND OUTSTANDING VOTING STOCK  OF
THE REORGANIZED INSURER, EITHER:
  (1)  (A)  ESTABLISH A CLOSED BLOCK, FOR POLICYHOLDER DIVIDEND PURPOSES
ONLY, CONSISTING OF ALL OF THE  PARTICIPATING  INDIVIDUAL  POLICIES  AND
CONTRACTS  OF THE MUTUAL LIFE INSURER OR THE REORGANIZED INSURER, AS THE

S. 4191--B                          5

CASE MAY BE, IN FORCE ON THE EFFECTIVE DATE AND FOR  WHICH  THE  INSURER
HAD AN EXPERIENCE-BASED DIVIDEND SCALE PAYABLE IN THE YEAR OF THE IMPLE-
MENTATION  DATE,  TO WHICH CLOSED BLOCK, ON OR BEFORE THE IMPLEMENTATION
DATE, SHALL BE ALLOCATED ASSETS OF THE INSURER IN AN AMOUNT THAT PRODUC-
ES  CASH FLOWS, TOGETHER WITH ANTICIPATED REVENUES FROM THE CLOSED BLOCK
BUSINESS, EXPECTED TO BE SUFFICIENT TO SUPPORT THE CLOSED BLOCK BUSINESS
INCLUDING PROVISION FOR PAYMENT OF CLAIMS AND THOSE EXPENSES  AND  TAXES
SPECIFIED  IN THE TERMS FOR THE ESTABLISHMENT OF THE CLOSED BLOCK AND TO
PROVIDE FOR CONTINUATION OF THE DIVIDEND  PRACTICES  IN  EFFECT  ON  THE
EFFECTIVE  DATE  IF THE CLOSED BLOCK IS ESTABLISHED ON OR BEFORE THE ONE
HUNDRED EIGHTIETH DAY AFTER THE EFFECTIVE DATE, OR OTHERWISE  THE  DIVI-
DEND  PRACTICES IN EFFECT ON THE IMPLEMENTATION DATE, PROVIDED, HOWEVER,
THAT NO POLICIES OR CONTRACTS ENTERING INTO FORCE AFTER THE  IMPLEMENTA-
TION  DATE  WILL BE INCLUDED IN THE CLOSED BLOCK, AND PROVIDED, FURTHER,
THAT, IN DETERMINING DIVIDEND PRACTICES OF THE REORGANIZING INSURER, THE
SUPERINTENDENT SHALL REVIEW DIVIDEND SCALES IN EFFECT FOR AT  LEAST  TWO
YEARS PRIOR TO THE FILING OF THE REORGANIZATION PLAN; AND
  (B)  THE  TERMS  FOR THE ESTABLISHMENT OF THE CLOSED BLOCK MAY PROVIDE
FOR CONDITIONS UNDER WHICH, WITH THE APPROVAL OF THE SUPERINTENDENT, THE
REORGANIZED INSURER MAY CEASE TO MAINTAIN THE  CLOSED  BLOCK  AND  ALLO-
CATION  OF  ASSETS THERETO, BUT REGARDLESS OF SUCH A CESSATION THE POLI-
CIES AND CONTRACTS CONSTITUTING CLOSED BLOCK BUSINESS SHALL REMAIN OBLI-
GATIONS OF THE REORGANIZED INSURER AND ANY DIVIDENDS  ON  SUCH  POLICIES
AND CONTRACTS SHALL BE DETERMINED AND APPORTIONED BY THE BOARD OF DIREC-
TORS  OF  THE  REORGANIZED  INSURER IN ACCORDANCE WITH THE TERMS OF SUCH
POLICIES AND CONTRACTS AND APPLICABLE PROVISIONS OF THIS CHAPTER; OR
  (2) PROVIDE AS TO PARTICIPATING INDIVIDUAL POLICIES AND  CONTRACTS  OF
THE  REORGANIZING  OR  REORGANIZED  INSURER IN SUCH MANNER AS THE SUPER-
INTENDENT MAY APPROVE.
  (C) THE GENERAL TERMS FOR THE ESTABLISHMENT OF  THE  CLOSED  BLOCK  OR
SUCH  ALTERNATIVE PROVISION UNDER SUBSECTION (B) OF THIS SECTION AND THE
PROPOSED DIVIDEND POLICY SHALL BE INCLUDED IN  THE  PLAN  UNDER  SECTION
EIGHT THOUSAND TWO OF THIS ARTICLE.
  (D)  THE  SUPERINTENDENT  MAY  APPOINT  ONE OR MORE CONSULTANTS AS THE
SUPERINTENDENT SHALL REASONABLY DEEM NECESSARY TO ADVISE THE SUPERINTEN-
DENT REGARDING THE PROPOSED TERMS FOR THE ESTABLISHMENT  OF  THE  CLOSED
BLOCK  OR  THE ALTERNATIVE PROVISION UNDER SUBSECTION (A) OR (B) OF THIS
SECTION; AND THE REORGANIZING  INSURER  SHALL  BE  RESPONSIBLE  FOR  THE
REASONABLE FEES AND EXPENSES OF ANY SUCH CONSULTANTS.
  (E) FOR PURPOSES OF THIS SECTION, "IMPLEMENTATION DATE" MEANS THE DATE
AS  OF  WHICH THE CLOSED BLOCK IS ESTABLISHED, AS SPECIFIED IN THE TERMS
FOR THE ESTABLISHMENT OF THE CLOSED BLOCK.
  S 8004. ADOPTION OF PLAN; SUBMISSION OF PLAN  TO  THE  SUPERINTENDENT.
(A)  A  MUTUAL  LIFE  INSURER  SEEKING  TO REORGANIZE UNDER THIS ARTICLE
SHALL, BY ACTION OF THREE-FOURTHS OF  ITS  ENTIRE  BOARD  OF  DIRECTORS,
ADOPT  A  PLAN CONSISTENT WITH THE PROVISIONS OF SECTIONS EIGHT THOUSAND
TWO AND EIGHT THOUSAND THREE OF THIS ARTICLE WHICH IS FAIR AND EQUITABLE
TO THE POLICYHOLDERS. THE RESOLUTION SHALL SPECIFY THE REASONS  FOR  AND
THE PURPOSES OF THE PROPOSED REORGANIZATION.
  (B)  THE  PLAN SHALL BE SUBMITTED TO THE SUPERINTENDENT, TOGETHER WITH
THE RESOLUTION OF THE BOARD OF DIRECTORS OF  THE  REORGANIZING  INSURER,
CERTIFIED  BY  THE SECRETARY THEREOF, ADOPTING THE PLAN PURSUANT TO THIS
ARTICLE.
  S 8005. AMENDMENT OR WITHDRAWAL OF PLAN. AT ANY TIME BEFORE  THE  PLAN
OF  REORGANIZATION  BECOMES EFFECTIVE AS PROVIDED IN SECTION EIGHT THOU-
SAND NINE OF THIS ARTICLE, THE REORGANIZING INSURER MAY,  BY  RESOLUTION

S. 4191--B                          6

OF  A THREE-FOURTHS MAJORITY OF ITS ENTIRE BOARD OF DIRECTORS, AMEND THE
PLAN OF REORGANIZATION OR WITHDRAW THE PLAN OF  REORGANIZATION.  IN  THE
CASE  OF A PLAN AMENDMENT, ALL REFERENCES IN THIS ARTICLE TO THE PLAN OF
REORGANIZATION  SHALL  BE DEEMED TO REFER TO THE PLAN AS AMENDED, BUT NO
AMENDMENT SHALL BE DEEMED TO CHANGE THE ADOPTION DATE  OF  THE  PLAN  OF
REORGANIZATION.  A  FURTHER  PUBLIC  HEARING IS NOT NECESSARY UNLESS THE
SUPERINTENDENT DETERMINES THAT AMENDMENTS SUBMITTED AFTER  THE  ORIGINAL
HEARING REQUIRED UNDER SECTION EIGHT THOUSAND SEVEN OF THIS ARTICLE WILL
SUBSTANTIALLY  ALTER  THE  PLAN.  IN  THE  EVENT THAT THE SUPERINTENDENT
DETERMINES THAT THE AMENDMENT SUBSTANTIALLY ALTERS THE PLAN, THE PLAN AS
AMENDED MUST BE SUBMITTED FOR RECONSIDERATION BY THE POLICYHOLDERS ENTI-
TLED TO VOTE ON THE PLAN AS PROVIDED IN SECTION EIGHT THOUSAND EIGHT  OF
THIS ARTICLE.
  S  8006.  CONSULTANTS.  THE  SUPERINTENDENT  MAY  APPOINT  ONE OR MORE
CONSULTANTS AS THE SUPERINTENDENT SHALL  REASONABLY  DEEM  NECESSARY  TO
ADVISE  THE  SUPERINTENDENT  IN  MAKING  THE  DETERMINATION  WHETHER THE
PROPOSED PLAN OF REORGANIZATION MEETS  THE  APPLICABLE  REQUIREMENTS  OF
THIS  ARTICLE.  THE  REORGANIZING  INSURER  SHALL BE RESPONSIBLE FOR THE
REASONABLE FEES AND EXPENSES OF ANY SUCH CONSULTANTS.  THIS  EXPENDITURE
SHALL  NOT  CONSTITUTE  AN  EXPENDITURE  OF PUBLIC FUNDS PURSUANT TO THE
STATE FINANCE LAW.
  S 8007. APPROVAL OF PLAN BY SUPERINTENDENT; HEARING.  THE  SUPERINTEN-
DENT  SHALL  ORDER  A PUBLIC HEARING ON THE PLAN TO BE HELD PRIOR TO THE
PLAN BEING SUBMITTED TO THE POLICYHOLDERS FOR THEIR APPROVAL. THE  REOR-
GANIZING INSURER SHALL GIVE WRITTEN NOTICE OF THE HEARING TO POLICYHOLD-
ERS  WHOSE POLICIES OR CONTRACTS ARE IN FORCE ON THE ADOPTION DATE, SENT
BY MAIL OR ELECTRONIC TRANSMISSION TO THE LAST KNOWN  MAILING  OR  ELEC-
TRONIC  ADDRESSES  OF  SUCH POLICYHOLDERS AS SHOWN ON THE RECORDS OF THE
REORGANIZING INSURER.   SUCH SUMMARY NOTICE  SHALL  BE  SUBJECT  TO  THE
APPROVAL  OF  THE SUPERINTENDENT, SHALL INCLUDE THE DATE, TIME AND PLACE
OF THE HEARING, AND SHALL INCLUDE BOTH A WEBSITE ADDRESS AND A TOLL-FREE
TELEPHONE NUMBER THROUGH WHICH MEMBERS MAY OBTAIN, IF  NOT  INCLUDED  IN
THE  SUMMARY  NOTICE, A FULL NOTICE OF THE HEARING AND EITHER A TRUE AND
CORRECT COPY OF THE PLAN, OR A SUMMARY THEREOF APPROVED  BY  THE  SUPER-
INTENDENT,  AND SUCH OTHER EXPLANATORY INFORMATION AS THE SUPERINTENDENT
SHALL APPROVE OR REQUIRE. THE REORGANIZING INSURER  SHALL  ALSO  POST  A
COPY  OF  SUCH NOTICE ON ITS WEBSITE. SUCH NOTICE SHALL BE SENT AT LEAST
THIRTY DAYS BEFORE THE DATE SPECIFIED FOR  THE  HEARING.    THE  HEARING
SHALL  BE HELD AT A TIME AND LOCATION IN THIS STATE DEEMED BY THE SUPER-
INTENDENT TO BE MOST  CONVENIENT  TO  THE  GREATEST  NUMBER  OF  PERSONS
AFFECTED  BY SUCH PLAN. AT SUCH HEARING ANY PERSON MAY BE HEARD IN FAVOR
OF, OR AGAINST, THE TERMS OF THE PLAN. THE PLAN OF REORGANIZATION  SHALL
BE  MADE AVAILABLE FOR PUBLIC INSPECTION AT ONE OFFICE OF THE DEPARTMENT
IN EACH CITY IN THIS STATE WHERE THE DEPARTMENT MAINTAINS AN OFFICE  AND
AT  THE PRINCIPAL OFFICE OF THE REORGANIZING INSURER. THE SUPERINTENDENT
SHALL APPROVE THE PLAN IF THE SUPERINTENDENT FINDS THAT:
  (A) THE PLAN IS FAIR AND EQUITABLE TO POLICYHOLDERS;
  (B) THE PLAN DOES NOT VIOLATE THIS ARTICLE; AND
  (C) AFTER GIVING EFFECT TO THE REORGANIZATION, THE REORGANIZED INSURER
WILL HAVE AN AMOUNT OF CAPITAL AND SURPLUS THE SUPERINTENDENT  DEEMS  TO
BE REASONABLY NECESSARY FOR ITS FUTURE SOLVENCY.
  S  8008. APPROVAL OF PLAN BY POLICYHOLDERS.  (A) A PROPOSAL TO APPROVE
THE PLAN OF REORGANIZATION  SHALL  BE  SUBMITTED  TO  POLICYHOLDERS  FOR
APPROVAL.  THE  POLICYHOLDERS ENTITLED TO NOTICE OF AND TO VOTE UPON THE
PROPOSAL SHALL BE THE HOLDERS OF POLICIES  OR  CONTRACTS  WHICH  ARE  IN
FORCE  ON THE ADOPTION DATE. THE REORGANIZING INSURER SHALL GIVE WRITTEN

S. 4191--B                          7

NOTICE STATING THE DATE, TIME AND PLACE FOR VOTING ON SUCH  PROPOSAL  TO
POLICYHOLDERS  ENTITLED  TO  NOTICE  OF  AND  TO VOTE ON THE PROPOSAL IN
ACCORDANCE WITH THIS SECTION, SENT BY MAIL OR ELECTRONIC TRANSMISSION TO
THE  LAST KNOWN MAILING OR ELECTRONIC ADDRESSES OF SUCH POLICYHOLDERS AS
SHOWN ON THE RECORDS OF THE REORGANIZING INSURER. SUCH NOTICE  SHALL  BE
SENT  AT  LEAST  THIRTY  DAYS  BEFORE THE DATE OF THE PROPOSED   VOTE TO
APPROVE THE PLAN OF REORGANIZATION. SUCH NOTICE MAY BE COMBINED WITH THE
SUMMARY NOTICE OF THE HEARING REQUIRED BY SECTION EIGHT  THOUSAND  SEVEN
OF  THIS  ARTICLE.  SUCH  NOTICE SHALL BE SUBJECT TO THE APPROVAL OF THE
SUPERINTENDENT AND SHALL INCLUDE BOTH A WEBSITE ADDRESS AND A  TOLL-FREE
TELEPHONE  NUMBER  THROUGH  WHICH  MEMBERS  MAY OBTAIN EITHER A TRUE AND
CORRECT COPY OF THE PLAN, OR A SUMMARY THEREOF APPROVED  BY  THE  SUPER-
INTENDENT,  AND SUCH OTHER EXPLANATORY INFORMATION AS THE SUPERINTENDENT
SHALL APPROVE OR REQUIRE.
  (B) EACH POLICYHOLDER ENTITLED TO VOTE ON THE PROPOSAL SHALL BE  ENTI-
TLED  TO  CAST  ONE  VOTE,  UNLESS  OTHERWISE PROVIDED IN THE CHARTER OR
BY-LAWS OF THE REORGANIZING INSURER, ON THE PROPOSAL, EITHER  IN  PERSON
OR  BY  MAIL  OR  BY  PROXY, IRRESPECTIVE OF THE NUMBER OR AMOUNT OF THE
POLICIES OR CONTRACTS HE OR SHE HOLDS. EACH PROXY SHALL BE REVOCABLE  AT
ANY  TIME,  EXCEPT  TO THE EXTENT THAT, AT THE TIME OF ATTEMPTED REVOCA-
TION, THE POWER CONFERRED THEREBY HAS ALREADY BEEN  PROPERLY  EXERCISED.
ALL  VOTES  SHALL  BE  BY WRITTEN BALLOT CAST IN PERSON OR BY MAIL OR BY
ELECTRONIC MEANS BY POLICYHOLDERS ENTITLED TO VOTE OR  BY  PROXY  AGENTS
DULY  APPOINTED  BY  POLICYHOLDERS  ENTITLED  TO VOTE. THE VOTING ON THE
PROPOSAL SHALL BE HELD AT THE HOME OFFICE OF THE  REORGANIZING  INSURER.
THE POLLS SHALL BE OPENED AT TEN O'CLOCK IN THE FORENOON AND REMAIN OPEN
UNTIL FOUR O'CLOCK IN THE AFTERNOON OF THE DAY FIXED FOR SUCH VOTING, AT
WHICH TIME THEY SHALL BE CLOSED.
  (C)  THE  PROPOSAL  TO  APPROVE  THE  PLAN  OF REORGANIZATION SHALL BE
ADOPTED BY THE AFFIRMATIVE VOTE OF AT LEAST TWO-THIRDS OF ALL VOTES CAST
BY POLICYHOLDERS ENTITLED TO VOTE.
  (D) THE SUPERINTENDENT SHALL HAVE POWER TO PRESCRIBE  RULES  GOVERNING
THE PROCEDURES FOR CONDUCT OF THE VOTING ON THE PROPOSAL.
  (E)  THE  PROVISIONS  OF SECTION FOUR THOUSAND TWO HUNDRED TEN OF THIS
CHAPTER SHALL NOT APPLY TO THE ACTION BY POLICYHOLDERS PURSUANT TO  THIS
SECTION.
  (F)  UPON  THE  CONCLUSION OF THE VOTE, THE REORGANIZING INSURER SHALL
SUBMIT TO THE SUPERINTENDENT:
  (1) A CERTIFIED COPY OF THE PLAN OF REORGANIZATION, SUBSCRIBED BY  THE
CHAIRMAN  OF THE BOARD, THE PRESIDENT OR ANY VICE PRESIDENT AND ATTESTED
BY THE SECRETARY OR AN ASSISTANT SECRETARY OF THE REORGANIZING INSURER;
  (2) A CERTIFICATE, SUBSCRIBED BY THE CHAIRMAN OF THE BOARD, THE PRESI-
DENT OR ANY VICE PRESIDENT AND ATTESTED BY THE  SECRETARY  OR  ASSISTANT
SECRETARY  OF  THE  REORGANIZING INSURER, OR SUBSCRIBED BY THE PERSON OR
PERSONS, IF ANY, DESIGNATED  BY  THE  SUPERINTENDENT  TO  SUPERVISE  THE
GIVING  OF  NOTICE OF THE DATE FOR ACTION ON THE PROPOSAL, TO THE EFFECT
THAT SUCH NOTICE WAS GIVEN IN ACCORDANCE WITH THIS SECTION TO ALL  POLI-
CYHOLDERS ENTITLED TO SUCH NOTICE; AND
  (3) A CERTIFICATE SUBSCRIBED BY AN OFFICER OF THE REORGANIZING INSURER
OF  THE  RESULTS  OF  THE  VOTE,  AS EVIDENCED BY VALID BALLOTS RECEIVED
BEFORE THE POLLS WERE CLOSED.
  EACH SUCH CERTIFICATE SHALL BE AFFIRMED AS TRUE UNDER THE PENALTIES OF
PERJURY BY THE PERSON OR PERSONS SUBSCRIBING THE SAME AND, IN  THE  CASE
OF  A  CERTIFICATE SIGNED BY OFFICERS OF THE REORGANIZING INSURER, SHALL
BE AFFIRMED UNDER THE CORPORATE SEAL OF THE REORGANIZING INSURER.

S. 4191--B                          8

  S 8009. FILING OF PLAN; EFFECTIVE DATE OF REORGANIZATION. (A) WHEN THE
SUPERINTENDENT HAS GIVEN HIS OR HER APPROVAL OF THE PLAN OF  REORGANIZA-
TION  AS  PROVIDED  IN SECTION EIGHT THOUSAND SEVEN OF THIS ARTICLE, AND
CERTIFICATION OF APPROVAL OF THE PLAN BY POLICYHOLDERS ENTITLED TO  VOTE
ON  THE  PLAN HAS BEEN MADE TO THE SUPERINTENDENT AS PROVIDED IN SECTION
EIGHT THOUSAND EIGHT OF THIS ARTICLE, A COPY OF THE PLAN OF  REORGANIZA-
TION,  WITH  THE  SUPERINTENDENT'S  APPROVAL  ENDORSED THEREON, SHALL BE
FILED IN THE OFFICE OF THE SUPERINTENDENT. A COPY OF SUCH PLAN CERTIFIED
BY THE SUPERINTENDENT SHALL ALSO BE FILED BY THE REORGANIZING INSURER IN
THE OFFICE OF THE CLERK OF THE COUNTY WHERE THE PRINCIPAL OFFICE OF  THE
REORGANIZING INSURER IS LOCATED WITHIN THIRTY DAYS AFTER THE SUPERINTEN-
DENT'S APPROVAL.
  (B)  THE  PLAN  OF REORGANIZATION SHALL TAKE EFFECT IN ACCORDANCE WITH
ITS TERMS ON THE DATE AND AT THE TIME WHEN THE FILING IN THE  OFFICE  OF
THE  SUPERINTENDENT  REQUIRED  BY  THIS SECTION HAS BEEN MADE OR ON SUCH
LATER DATE OR AT SUCH LATER TIME, IF ANY, AS MAY HAVE BEEN SPECIFIED  IN
OR DETERMINED IN ACCORDANCE WITH THE PLAN OR PURSUANT THERETO.
  (C)  AS  OF  THE  EFFECTIVE  DATE,  THE  SUPERINTENDENT SHALL ISSUE AN
AMENDED CERTIFICATE OF AUTHORITY TO THE REORGANIZED INSURER, AND, IF THE
PLAN OF REORGANIZATION SPECIFIES THAT THE REORGANIZED  INSURER  PROPOSES
TO  CONTINUE  TO ISSUE FOR DELIVERY IN THIS STATE PARTICIPATING POLICIES
OR CONTRACTS, THE SUPERINTENDENT SHALL, IN  ACCORDANCE  WITH  SUBSECTION
(F)  OF  SECTION  FOUR  THOUSAND TWO HUNDRED THIRTY-ONE OF THIS CHAPTER,
ISSUE A PERMIT AUTHORIZING IT TO DO SO.
  S 8010. EFFECT OF REORGANIZATION. UPON THE EFFECTIVE DATE OF A PLAN OF
REORGANIZATION IN ACCORDANCE WITH SECTION EIGHT THOUSAND  NINE  OF  THIS
ARTICLE:
  (A) THE REORGANIZING INSURER SHALL IMMEDIATELY BECOME A DOMESTIC STOCK
LIFE INSURER;
  (B)  THE  MEMBERS  OF  THE  REORGANIZING INSURER ON THE EFFECTIVE DATE
SHALL IMMEDIATELY BECOME MEMBERS OF  THE  MUTUAL  HOLDING  COMPANY  WITH
MEMBERSHIP  INTERESTS THEREIN, AND ALL MEMBERSHIP INTERESTS IN THE REOR-
GANIZING INSURER SHALL BE EXTINGUISHED;
  (C) PERSONS BECOMING POLICYHOLDERS OF THE  REORGANIZED  INSURER  AFTER
THE  EFFECTIVE DATE OF THE PLAN SHALL BECOME MEMBERS OF THE MUTUAL HOLD-
ING COMPANY IMMEDIATELY UPON ISSUANCE OF THE POLICY OR CONTRACT;
  (D) ONE HUNDRED PERCENT OF THE VOTING STOCK ISSUED BY THE  REORGANIZED
INSURER  SHALL  BE  OWNED, DIRECTLY OR THROUGH ONE OR MORE STOCK HOLDING
COMPANIES, BY THE MUTUAL HOLDING COMPANY,  AND  AT  NO  TIME  SUBSEQUENT
SHALL  SUCH  MUTUAL  HOLDING  COMPANY OWN LESS THAN FIFTY-ONE PERCENT OF
SUCH VOTING STOCK; AND
  (E) ANY OTHER REORGANIZATION  OF  THE  REORGANIZING  INSURER  AND  ITS
SUBSIDIARIES  SPECIFIED IN THE PLAN SHALL BECOME EFFECTIVE IN ACCORDANCE
WITH THE TERMS OF THE PLAN. EXCEPT FOR THE RIGHT TO VOTE, THE RIGHTS  OF
ALL  POLICYHOLDERS  WITH  RESPECT  TO THE REORGANIZED INSURER THEREAFTER
SHALL BE AS SPECIFIED IN THEIR POLICIES OR CONTRACTS, IN THE CHARTER  OF
THE REORGANIZED INSURER AND IN THE PLAN OF REORGANIZATION.
  S  8011.  CORPORATE  EXISTENCE. (A) THE REORGANIZED INSURER SHALL BE A
CONTINUATION OF THE REORGANIZING INSURER, AND THE  REORGANIZATION  SHALL
IN  NO WAY ANNUL, MODIFY OR CHANGE ANY OF SUCH INSURER'S EXISTING SUITS,
RIGHTS, CONTRACTS OR LIABILITIES EXCEPT AS PROVIDED IN THE APPROVED PLAN
OF REORGANIZATION. ALL RIGHTS, FRANCHISES AND INTERESTS OF THE  REORGAN-
IZING  INSURER  IN  AND TO EVERY SPECIES OF PROPERTY, REAL, PERSONAL AND
MIXED, AND THINGS IN ACTION THEREUNTO BELONGING, SHALL BE VESTED IN  THE
CONTINUING  COMPANY,  WITHOUT  ANY  DEED OR TRANSFER, AND SIMULTANEOUSLY
THEREWITH SUCH CONTINUING COMPANY SHALL BE SUBJECT TO ALL OF  THE  OBLI-

S. 4191--B                          9

GATIONS  AND  LIABILITIES  OF THE REORGANIZING INSURER, OTHER THAN OBLI-
GATIONS AND LIABILITIES WITH RESPECT TO  THE  POLICYHOLDERS'  MEMBERSHIP
INTERESTS EXTINGUISHED BY THE PLAN OF REORGANIZATION.
  (B)  NO ACTION OR PROCEEDING PENDING AT THE TIME OF THE REORGANIZATION
TO WHICH THE REORGANIZING INSURER MAY BE A  PARTY  SHALL  BE  ABATED  OR
DISCONTINUED BY REASON OF SUCH REORGANIZATION, BUT THE SAME MAY BE PROS-
ECUTED TO FINAL JUDGMENT IN THE SAME MANNER AS IF THE REORGANIZATION HAD
NOT  TAKEN PLACE, OR THE REORGANIZED INSURER MAY BE SUBSTITUTED IN PLACE
OF SUCH REORGANIZING INSURER BY ORDER OF THE COURT IN WHICH  THE  ACTION
OR PROCEEDING MAY BE PENDING.
  S  8012.  DIRECTORS  AND OFFICERS. EXCEPT AS OTHERWISE PROVIDED IN THE
PLAN OF REORGANIZATION AND SUBJECT TO SUBSECTION (D)  OF  SECTION  EIGHT
THOUSAND  SEVENTEEN  OF  THIS ARTICLE, THE DIRECTORS AND OFFICERS OF THE
REORGANIZING INSURER SHALL SERVE AS DIRECTORS AND OFFICERS OF THE  REOR-
GANIZED INSURER, ANY STOCK HOLDING COMPANY AND THE MUTUAL HOLDING COMPA-
NY UNTIL NEW DIRECTORS AND OFFICERS HAVE BEEN DULY ELECTED AND QUALIFIED
PURSUANT  TO THE CHARTER OR CERTIFICATE OF INCORPORATION AND THE BY-LAWS
OF THE RESPECTIVE COMPANIES.
  S 8013. NOTICE OF PROPOSED REORGANIZATION.  (A)  IN  ADDITION  TO  THE
NOTICES  GIVEN PURSUANT TO SECTION EIGHT THOUSAND EIGHT OF THIS ARTICLE,
THE REORGANIZING INSURER SHALL GIVE WRITTEN NOTICE OF  THE  PENDENCY  OF
THE  PROPOSED REORGANIZATION AND OF THE EFFECT THEREOF TO ALL PERSONS TO
WHOM THE REORGANIZING INSURER DELIVERS POLICIES OR CONTRACTS  WHICH  ARE
ISSUED  AFTER  THE  ADOPTION DATE AND BEFORE THE PLAN TAKES EFFECT OR IS
WITHDRAWN, SENT BY MAIL OR ELECTRONIC TRANSMISSION  TO  THE  LAST  KNOWN
MAILING  OR  ELECTRONIC  ADDRESSES OF SUCH POLICYHOLDERS AS SHOWN ON THE
RECORDS OF THE REORGANIZING INSURER. EXCEPT  AS  OTHERWISE  PROVIDED  IN
THIS  SECTION,  SUCH  PERSONS  SHALL  HAVE THE RIGHT, UNLESS THE LAWS OF
THEIR DOMICILIARY STATE PROVIDE OTHERWISE, TO RESCIND SUCH  POLICIES  OR
CONTRACTS,  AND TO BE REFUNDED ANY AMOUNTS PAID WITH RESPECT THERETO, BY
WRITTEN NOTICE TO SUCH INSURER OR ITS AGENT GIVEN  WITHIN  TEN  DAYS  OF
THEIR RECEIPT OF THE AFORESAID NOTICE GIVEN BY SUCH INSURER.
  (B)  NEITHER  THE  RECEIPT OF SUCH POLICY OR CONTRACT NOR THE RIGHT TO
RECEIVE SUCH NOTICE SHALL ENTITLE SUCH PERSONS TO VOTE ON  THE  PROPOSED
PLAN  OF REORGANIZATION PURSUANT TO SECTION EIGHT THOUSAND EIGHT OF THIS
ARTICLE OR VEST SUCH PERSONS  WITH  ANY  OTHER  RIGHTS  OR  ENTITLEMENTS
EXCEPT AS PROVIDED FOR IN THIS ARTICLE.
  (C) WHERE, PRIOR TO THE ISSUANCE OF A POLICY OR CONTRACT, THE REORGAN-
IZING  INSURER PROVIDES THE PROSPECTIVE POLICYHOLDERS WITH NOTICE OF THE
PENDENCY OF THE PROPOSED REORGANIZATION AND OF THE EFFECT THEREOF, WHICH
NOTICE HAS BEEN APPROVED FOR SUCH PURPOSE BY THE  SUPERINTENDENT,  THEN,
UNLESS  THE  LAWS  OF  THE  POLICYHOLDER'S  DOMICILIARY  STATE OTHERWISE
REQUIRE, SUCH POLICYHOLDERS SHALL  NOT  HAVE  THE  FOREGOING  RIGHTS  OF
RESCISSION AND REFUND.
  S  8014.  FAILURE TO GIVE NOTICE. IF THE REORGANIZING INSURER COMPLIES
SUBSTANTIALLY AND IN GOOD FAITH WITH THE REQUIREMENTS  OF  THIS  ARTICLE
WITH  RESPECT TO THE GIVING OF ANY REQUIRED NOTICE TO POLICYHOLDERS, ITS
FAILURE IN ANY CASE TO GIVE SUCH NOTICE TO ANY PERSON OR  PERSONS  ENTI-
TLED   THERETO  SHALL  NOT  IMPAIR  THE  VALIDITY  OF  THE  ACTIONS  AND
PROCEEDINGS TAKEN UNDER THIS ARTICLE  OR  ENTITLE  SUCH  PERSON  TO  ANY
INJUNCTIVE  OR  OTHER  EQUITABLE  RELIEF  WITH RESPECT THERETO, BUT THIS
SECTION SHALL NOT IMPAIR ANY CLAIM FOR DAMAGES SUCH  PERSON  OR  PERSONS
WOULD OTHERWISE HAVE DUE TO SUCH FAILURE.
  S  8015.  LIMITATIONS  OF  ACTIONS;  SECURITY. (A) NOTWITHSTANDING ANY
OTHER PROVISION OF LAW TO THE CONTRARY AND EXCEPT AS OTHERWISE  PROVIDED
IN  SUBSECTION (C) OR (D) OF THIS SECTION, ACTIONS CONCERNING OR ARISING

S. 4191--B                         10

OUT OF ANY PLAN OF REORGANIZATION, PROPOSED PLAN OF REORGANIZATION, PLAN
AMENDMENT OR PROPOSED PLAN AMENDMENT UNDER  THIS  ARTICLE  OR  ANY  ACTS
TAKEN OR PROPOSED TO BE TAKEN UNDER THIS ARTICLE MUST BE COMMENCED WITH-
IN EIGHTEEN MONTHS AFTER THE PLAN OF REORGANIZATION OR PLAN AMENDMENT IS
FILED  PURSUANT TO SUBSECTION (A) OF SECTION EIGHT THOUSAND NINE OF THIS
ARTICLE OR THE CHARTER IS FILED PURSUANT TO SUBSECTION  (C)  OF  SECTION
EIGHT  THOUSAND  SEVENTEEN  OF  THIS ARTICLE, AS THE CASE MAY BE, IN THE
OFFICE OF THE SUPERINTENDENT OR ONE YEAR FROM THE EFFECTIVE DATE OF  THE
PLAN  OF  REORGANIZATION, WHICHEVER IS LATER, OR IF THE PLAN OF REORGAN-
IZATION OR PLAN AMENDMENT IS WITHDRAWN, WITHIN ONE YEAR  FROM  THE  DATE
THE BOARD OF DIRECTORS APPROVES A RESOLUTION TO WITHDRAW THE PLAN. WHERE
AN  ACTION  CONCERNS  OR ARISES OUT OF A PLAN AMENDMENT OR PROPOSED PLAN
AMENDMENT MADE UNDER SECTION EIGHT THOUSAND FIVE OF  THIS  ARTICLE,  THE
APPLICABLE  TIME  PERIOD  IS MEASURED FROM THE FILING, EFFECTIVE DATE OR
APPROVAL OF WITHDRAWAL OF THE PLAN AMENDMENT, AS THE CASE MAY BE.  WHERE
THE  ACTION  ARISES OUT OF EITHER A TRANSFER OF SUBSIDIARIES PURSUANT TO
SECTION EIGHT THOUSAND TWENTY OF THIS ARTICLE OR A SALE OF SECURITIES OF
THE REORGANIZED INSURER OR ANY STOCK HOLDING COMPANY PURSUANT TO SECTION
EIGHT THOUSAND EIGHTEEN OF THIS ARTICLE, WHICH TRANSFER OR SALE  IS  NOT
CONTEMPLATED BY THE PLAN, THEN THE APPLICABLE TIME PERIOD SHALL BE MEAS-
URED  FROM  THE EFFECTIVE DATE OF SUCH TRANSFER OR SALE, AS THE CASE MAY
BE. WHERE THE ACTION ARISES OUT OF THE TERMS OR PROPOSED TERMS  FOR  THE
ESTABLISHMENT OF THE CLOSED BLOCK OR SUCH ALTERNATIVE PROVISION PURSUANT
TO  SUBSECTION (B) OF SECTION EIGHT THOUSAND THREE OF THIS ARTICLE, THEN
THE APPLICABLE TIME PERIOD SHALL BE  MEASURED  FROM  THE  IMPLEMENTATION
DATE  AS  DEFINED  IN  SUBSECTION (E) OF SECTION EIGHT THOUSAND THREE OF
THIS ARTICLE. WHERE THE ACTION CONCERNS OR ARISES OUT OF A PLAN OF REOR-
GANIZATION ADOPTED PURSUANT TO SECTION EIGHT THOUSAND NINETEEN  OF  THIS
ARTICLE,  THEN  THE  APPLICABLE  TIME  PERIOD SHALL BE MEASURED FROM THE
EFFECTIVE DATE OF THE PLAN OF REORGANIZATION.
  (B) IN ANY ACTION REFERRED TO IN SUBSECTION (A) OF THIS  SECTION,  THE
PLAINTIFF  OR  PLAINTIFFS SHALL BE REQUIRED, UPON A MOTION OF THE MUTUAL
HOLDING COMPANY, REORGANIZING INSURER  OR  REORGANIZED  INSURER  OR  ANY
STOCK  HOLDING  COMPANY  WHICH  ESTABLISHES  TO  THE SATISFACTION OF THE
COURT, THAT A SUBSTANTIAL LIKELIHOOD EXISTS THAT SUCH ACTION IS  BROUGHT
WITHOUT MERIT AND WITH AN INTENTION TO DELAY OR HARASS, TO GIVE ADEQUATE
SECURITY  FOR  THE DAMAGES AND REASONABLE EXPENSES, INCLUDING ATTORNEYS'
FEES, WHICH MAY BE INCURRED AS A RESULT OF, OR IN CONNECTION WITH,  SUCH
ACTION BY SUCH COMPANY AND BY ANY OTHER DEFENDANTS IN SUCH ACTION OR FOR
WHICH SUCH COMPANY MAY BECOME LIABLE, TO WHICH SECURITY THE MUTUAL HOLD-
ING  COMPANY,  REORGANIZING  INSURER OR REORGANIZED INSURER OR ANY STOCK
HOLDING COMPANY SHALL HAVE RECOURSE IN SUCH AMOUNT AS THE  COURT  DETER-
MINES  UPON  THE  TERMINATION OF SUCH ACTION. THE AMOUNT OF SECURITY MAY
FROM TIME TO TIME BE INCREASED OR DECREASED IN  THE  DISCRETION  OF  THE
COURT UPON A SHOWING THAT THE SECURITY PROVIDED HAS OR MAY BECOME INADE-
QUATE OR EXCESSIVE.
  (C)  NOTWITHSTANDING  ANY  OTHER PROVISION OF LAW TO THE CONTRARY, ANY
ACTION SEEKING A STAY, RESTRAINING ORDER, INJUNCTION OR  SIMILAR  REMEDY
TO  PREVENT  OR  DELAY  THE  CLOSING OF ANY TRANSACTION PURSUANT TO THIS
ARTICLE OR OF ANY TRANSACTION DESCRIBED IN THE  PLAN  OF  REORGANIZATION
MUST  BE  COMMENCED WITHIN ONE HUNDRED TWENTY DAYS AFTER, AS APPLICABLE:
(1) THE APPROVAL OF A  PLAN  OF  REORGANIZATION  BY  THE  SUPERINTENDENT
PURSUANT  TO  SECTION EIGHT THOUSAND SEVEN OR EIGHT THOUSAND NINETEEN OF
THIS ARTICLE, AS THE CASE MAY BE; OR (2) THE APPROVAL OF THE SUPERINTEN-
DENT PURSUANT TO SECTION EIGHT THOUSAND TWENTY OF THIS ARTICLE.

S. 4191--B                         11

  (D) ANY ACTION OR PROCEEDING AGAINST THE SUPERINTENDENT OR  ANY  OTHER
GOVERNMENTAL  BODY OR OFFICER IN CONNECTION WITH ANY ACT TAKEN OR ORDER,
REGULATION OR RULE ISSUED PURSUANT TO THIS  ARTICLE  MUST  BE  COMMENCED
WITHIN  ONE  HUNDRED TWENTY DAYS FROM THE DATE OF SUCH ACT OR SIGNING OF
SUCH ORDER, REGULATION OR RULE.
  (E) ANY PERSON AGGRIEVED BY ANY ACT TAKEN OR ORDER, REGULATION OR RULE
ISSUED  PURSUANT TO THIS ARTICLE MAY PETITION FOR JUDICIAL REVIEW IN THE
MANNER PROVIDED BY ARTICLE SEVENTY-EIGHT OF THE CIVIL PRACTICE  LAW  AND
RULES,  PURSUANT  TO THE LIMITATIONS PERIOD PRESCRIBED IN SUBSECTION (D)
OF THIS SECTION. THE PETITION SHALL BE BROUGHT IN THE  JUDICIAL  DEPART-
MENT  EMBRACING THE COUNTY WHEREIN THE ACT WAS TAKEN OR THE ORDER, REGU-
LATION OR RULE WAS ISSUED. ALL  SUCH  PROCEEDINGS  SHALL  BE  HEARD  AND
DETERMINED  AS EXPEDITIOUSLY AS POSSIBLE AND WITH LAWFUL PRECEDENCE OVER
OTHER MATTERS. ACTS TAKEN OR ORDERS, REGULATIONS OR RULES ISSUED  PURSU-
ANT TO THIS ARTICLE SHALL NOT BE STAYED OR ENJOINED EXCEPT UPON APPLICA-
TION  AFTER NOTICE TO THE SUPERINTENDENT AND TO THE ATTORNEY GENERAL AND
UPON A SHOWING THAT THE  PETITIONER  HAS  A  SUBSTANTIAL  LIKELIHOOD  OF
SUCCESS  AND  WILL  SUFFER IRREPARABLE HARM IF THE STAY OR INJUNCTION IS
NOT GRANTED.
  S 8016. PROHIBITED TRANSACTIONS BY OFFICERS, DIRECTORS AND  EMPLOYEES.
NO  DIRECTOR,  OFFICER,  AGENT  OR  EMPLOYEE OF THE REORGANIZING INSURER
SHALL RECEIVE ANY FEE, COMMISSION OR OTHER VALUABLE CONSIDERATION  WHAT-
SOEVER,  OTHER  THAN  REGULAR SALARY AND COMPENSATION, FOR IN ANY MANNER
AIDING, PROMOTING OR ASSISTING IN THE REORGANIZATION EXCEPT AS SET FORTH
IN THE PLAN APPROVED BY THE SUPERINTENDENT.
  S 8017. REQUIREMENTS APPLICABLE TO A MUTUAL HOLDING COMPANY.  (A)  THE
FOLLOWING  PROVISIONS OF THIS ARTICLE ARE APPLICABLE TO A MUTUAL HOLDING
COMPANY:
  (1) THE FOLLOWING PROVISIONS OF ARTICLE TWELVE OF THIS  CHAPTER  SHALL
APPLY  TO  A  MUTUAL HOLDING COMPANY AS THOUGH IT WERE A DOMESTIC MUTUAL
INSURER: SECTION ONE THOUSAND TWO HUNDRED ONE OF  THIS  CHAPTER  TO  THE
EXTENT PROVIDED IN SUBSECTION (C) OF THIS SECTION AND SECTIONS ONE THOU-
SAND  TWO  HUNDRED  TWO,  ONE THOUSAND TWO HUNDRED SIX, ONE THOUSAND TWO
HUNDRED EIGHT, ONE THOUSAND TWO HUNDRED NINE, ONE THOUSAND  TWO  HUNDRED
TWELVE  AND  ONE  THOUSAND  TWO HUNDRED FIFTEEN THROUGH ONE THOUSAND TWO
HUNDRED NINETEEN OF THIS CHAPTER;
  (2) THE PROVISIONS OF THE BUSINESS CORPORATION LAW THAT ARE APPLICABLE
TO A DOMESTIC MUTUAL LIFE INSURER SHALL APPLY TO A MUTUAL HOLDING COMPA-
NY AS THOUGH IT WERE A DOMESTIC MUTUAL INSURER; AND
  (3) THE PROVISIONS OF SECTION FOUR THOUSAND TWO HUNDRED  TEN  OF  THIS
CHAPTER APPLICABLE TO A DOMESTIC MUTUAL LIFE INSURER SHALL BE APPLIED TO
A MUTUAL HOLDING COMPANY AS THOUGH ITS MEMBERS WERE VOTING POLICYHOLDERS
OF A MUTUAL LIFE INSURER.
  (B)  A MUTUAL HOLDING COMPANY SHALL NOT DISSOLVE, LIQUIDATE OR WIND UP
AND DISSOLVE EXCEPT THROUGH PROCEEDINGS  UNDER  SECTION  EIGHT  THOUSAND
NINETEEN  OF  THIS ARTICLE, ARTICLE SEVENTY-FOUR OF THIS CHAPTER FOR THE
LIQUIDATION OR DISSOLUTION OF THE REORGANIZED INSURER OR AS  THE  SUPER-
INTENDENT MAY OTHERWISE APPROVE. IN THE EVENT ANY PROCEEDINGS ARE INSTI-
TUTED UNDER ARTICLE SEVENTY-FOUR OF THIS CHAPTER FOR THE COMPLETE LIQUI-
DATION OF REORGANIZED INSURER PURSUANT TO THIS ARTICLE:
  (1)  THE  MUTUAL HOLDING COMPANY FORMED AS PART OF SUCH REORGANIZATION
SHALL AUTOMATICALLY BECOME A PARTY TO SUCH PROCEEDINGS;
  (2) ALL OF THE MUTUAL HOLDING COMPANY'S ASSETS (INCLUDING ITS HOLDINGS
OF SHARES IN THE REORGANIZED INSURER OR ANY STOCK HOLDING COMPANY) SHALL
BE DEEMED ASSETS OF THE ESTATE OF THE DOMESTIC STOCK LIFE INSURER TO THE
EXTENT NECESSARY TO SATISFY CLAIMS OF PERSONS WHO HAVE CLASS ONE,  CLASS

S. 4191--B                         12

TWO,  CLASS  THREE  OR CLASS FOUR CLAIMS UNDER SUBSECTION (A) OF SECTION
SEVEN THOUSAND FOUR HUNDRED THIRTY-FIVE OF THIS CHAPTER WITH RESPECT  TO
SUCH DOMESTIC STOCK LIFE INSURER; AND
  (3)  MEMBERS  OF  THE  MUTUAL  HOLDING COMPANY SHALL BE DEEMED TO HOLD
CLASS EIGHT CLAIMS WITH RESPECT TO  THE  MUTUAL  HOLDING  COMPANY  UNDER
SUBSECTION  (A)  OF  SECTION  SEVEN THOUSAND FOUR HUNDRED THIRTY-FIVE OF
THIS CHAPTER.
  (C) THE CHARTER OF THE MUTUAL HOLDING COMPANY SHALL BE FILED WITH  THE
SUPERINTENDENT AND SHALL CONTAIN THE MATTERS REQUIRED TO BE CONTAINED IN
THE  CHARTER  OF  A DOMESTIC MUTUAL LIFE INSURER BY SECTION ONE THOUSAND
TWO HUNDRED ONE OF THIS CHAPTER, EXCEPT THAT  THE  NAME  OF  THE  MUTUAL
HOLDING  COMPANY  SHALL  CONTAIN THE WORD "MUTUAL" AND SHALL NOT CONTAIN
THE WORD "INSURANCE," "ASSURANCE" OR "ANNUITY" AND THE COMPANY'S  POWERS
SHALL NOT INCLUDE DOING AN INSURANCE BUSINESS. THE CHARTER SHALL CONTAIN
PROVISIONS STATING THAT:
  (1) IT IS A MUTUAL HOLDING COMPANY ORGANIZED UNDER THIS ARTICLE;
  (2)  A PURPOSE SHALL BE TO HOLD, DIRECTLY OR THROUGH ONE OR MORE STOCK
HOLDING COMPANIES, NOT LESS THAN FIFTY-ONE PERCENT OF THE  VOTING  STOCK
OF A REORGANIZED INSURER;
  (3) IT SHALL NOT BE AUTHORIZED TO ISSUE VOTING STOCK;
  (4) IT SHALL NOT BE AUTHORIZED TO CONDUCT ANY BUSINESS OTHER THAN THAT
OF  A HOLDING COMPANY, EXCEPT FOR THE ACQUISITION, OWNERSHIP, MANAGEMENT
AND DISPOSITION OF ITS ASSETS AND ALL ACTIONS REASONABLY INCIDENT THERE-
TO; AND
  (5) IT SHALL HAVE MEMBERS HAVING THE RIGHTS SPECIFIED IN THIS  SECTION
AND  SECTION  EIGHT  THOUSAND TEN OF THIS ARTICLE AND IN ITS CHARTER AND
BY-LAWS. THE CHARTER SHALL ALSO CONTAIN  PROVISIONS  SETTING  FORTH  ANY
RIGHTS  OF  MEMBERS  OF THE MUTUAL HOLDING COMPANY IN THE SURPLUS OF THE
MUTUAL HOLDING COMPANY.
  (D) AT LEAST TWO-THIRDS OF THE DIRECTORS OF THE MUTUAL HOLDING COMPANY
AND OF ANY STOCK HOLDING COMPANY, ALL OF THE MEMBERS OF THE COMPENSATION
COMMITTEE OF THE BOARD OF DIRECTORS OF THE MUTUAL HOLDING COMPANY AND OF
ANY STOCK HOLDING COMPANY, AT LEAST TWO-THIRDS OF  THE  MEMBERS  OF  ANY
COMMITTEE  RESPONSIBLE FOR MAKING DECISIONS AFFECTING THE CAPITAL STRUC-
TURE OR MERGERS AND ACQUISITIONS, AND A MAJORITY  OF  THE  DIRECTORS  ON
EACH  OTHER  COMMITTEE  OF  THE BOARD OF DIRECTORS OF THE MUTUAL HOLDING
COMPANY AND ANY STOCK HOLDING COMPANY SHALL BE  OUTSIDE  DIRECTORS.  THE
AGGREGATE  PERCENTAGE  OF  VOTING  SECURITIES OF THE REORGANIZED INSURER
DIRECTLY OR INDIRECTLY OWNED, CONTROLLED OR HELD WITH THE POWER TO VOTE,
EITHER PERSONALLY OR BY PERSONS (OTHER THAN THE MUTUAL  HOLDING  COMPANY
AND  ANY STOCK HOLDING COMPANY) OF WHICH THEY ARE DIRECTORS, OFFICERS OR
EMPLOYEES, BY OUTSIDE DIRECTORS, SHALL NOT EXCEED THREE PERCENT OR  SUCH
LESSER  PERCENTAGE  AS MAY BE DETERMINED BY THE SUPERINTENDENT IN HIS OR
HER APPROVAL OF THE MUTUAL  HOLDING  COMPANY'S  PLAN  OF  REORGANIZATION
PURSUANT  TO THIS ARTICLE. THE BY-LAWS OF THE MUTUAL HOLDING COMPANY AND
ANY STOCK HOLDING COMPANY SHALL PROVIDE THAT THE AFFIRMATIVE VOTE OF  AT
LEAST  TWO-THIRDS  OF  THE  BOARD  OF DIRECTORS OF SUCH COMPANY SHALL BE
REQUIRED FOR ANY ACTION BY SUCH COMPANY TO ADOPT A  PLAN  OF  CONVERSION
PURSUANT  TO SECTION EIGHT THOUSAND NINETEEN OF THIS ARTICLE, ENTER INTO
A MERGER, CONDUCT A PUBLIC OFFERING OR AUTHORIZE  THE  ISSUANCE  OF  ANY
VOTING  STOCK  OR SECURITY CONVERTIBLE INTO VOTING STOCK OF THE REORGAN-
IZED INSURER OR THE STOCK HOLDING COMPANY TO ANY PERSON OTHER  THAN  THE
MUTUAL HOLDING COMPANY OR THE STOCK HOLDING COMPANY.
  (E)  THE  SUPERINTENDENT  MAY, BY REGULATION, REQUIRE A MUTUAL HOLDING
COMPANY TO FILE ANNUAL STATEMENTS WITH THE SUPERINTENDENT IN  SUCH  FORM
AS THE SUPERINTENDENT SHALL PRESCRIBE.

S. 4191--B                         13

  (F)  WITH  THE  WRITTEN APPROVAL OF THE SUPERINTENDENT, AND SUBJECT TO
THE CONDITIONS THAT THE SUPERINTENDENT  MAY  IMPOSE,  A  MUTUAL  HOLDING
COMPANY OR STOCK COMPANY MAY:
  (1)  MERGE  OR  CONSOLIDATE  WITH,  OR ACQUIRE THE ASSETS OF, A MUTUAL
HOLDING COMPANY ORGANIZED PURSUANT TO THIS ARTICLE OR  PURSUANT  TO  THE
LAWS OF ANOTHER STATE;
  (2)  EITHER  ALONE  OR  TOGETHER  WITH  ONE OR MORE OF THE REORGANIZED
INSURER, ANY STOCK HOLDING COMPANIES OR ANY SUBSIDIARIES OF ANY OF THEM,
MERGE OR CONSOLIDATE WITH OR ACQUIRE THE ASSETS OF A MUTUAL LIFE  INSUR-
ER;
  (3) MERGE OR CONSOLIDATE WITH ANY OTHER PERSON.
  (G)  A  MUTUAL  HOLDING  COMPANY MAY ALSO ACQUIRE THE CAPITAL STOCK OR
ASSETS OF OTHER PERSONS.
  (H) A MEMBER OF  A  MUTUAL  HOLDING  COMPANY  IS  NOT,  AS  A  MEMBER,
PERSONALLY LIABLE FOR THE ACTS, DEBTS, LIABILITIES OR OBLIGATIONS OF THE
COMPANY.  NO ASSESSMENT OF ANY KIND MAY BE IMPOSED UPON THE MEMBERS OF A
MUTUAL HOLDING COMPANY BY THE BOARD OF DIRECTORS, MEMBERS  OR  CREDITORS
OF THE MUTUAL HOLDING COMPANY OR BECAUSE OF ANY LIABILITY OF ANY COMPANY
OWNED OR CONTROLLED, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, BY THE
MUTUAL  HOLDING  COMPANY OR BECAUSE OF ANY ACT, DEBT OR LIABILITY OF THE
MUTUAL HOLDING COMPANY.
  (I) A MEMBERSHIP INTEREST  IN  A  MUTUAL  HOLDING  COMPANY  SHALL  NOT
CONSTITUTE A SECURITY UNDER THE LAWS OF THIS STATE.
  (J) THE SUPERINTENDENT SHALL RETAIN JURISDICTION OVER ANY MUTUAL HOLD-
ING COMPANY ORGANIZED PURSUANT TO THIS ARTICLE.
  (K)  DIRECTORS  OF  THE  MUTUAL  HOLDING COMPANY SHALL BE ELECTED BY A
MAJORITY VOTE OF ALL MEMBERS WHO VOTE IN SUCH ELECTION IN PERSON  OR  BY
PROXY.  IF THE REORGANIZED INSURER TAKES ANY ACTION (OTHER THAN ELECTION
OF ITS DIRECTORS) THAT WOULD REQUIRE A  VOTE  OF  POLICYHOLDERS  IF  THE
REORGANIZED  INSURER  WERE A MUTUAL LIFE INSURER, THEN SUCH ACTION SHALL
REQUIRE A VOTE OF MEMBERS OF THE MUTUAL HOLDING COMPANY.
  S 8018. OTHER REQUIREMENTS APPLICABLE TO A STOCK HOLDING COMPANY AND A
MUTUAL HOLDING COMPANY. (A) FROM AND AFTER THE  EFFECTIVE  DATE  OF  THE
PLAN,  THE MUTUAL HOLDING COMPANY SHALL HOLD, DIRECTLY OR THROUGH ONE OR
MORE STOCK HOLDING COMPANIES, AT LEAST FIFTY-ONE PERCENT OF  THE  ISSUED
AND OUTSTANDING VOTING STOCK OF THE REORGANIZED INSURER. THE REORGANIZED
INSURER  AND  ANY  STOCK HOLDING COMPANY MAY ISSUE TO THE MUTUAL HOLDING
COMPANY  AND  TO  OTHER  PERSONS  SECURITIES,  INCLUDING  VOTING  STOCK,
NON-VOTING  STOCK  AND  SECURITIES CONVERTIBLE INTO VOTING OR NON-VOTING
STOCK, PROVIDED THAT, SUCH ISSUANCE AND THE TERMS OF SUCH ISSUANCE SHALL
HAVE RECEIVED THE  PRIOR  APPROVAL  OF  THE  SUPERINTENDENT,  WHO  SHALL
CONSIDER THE INTERESTS OF THE MUTUAL HOLDING COMPANY AND ITS MEMBERS AND
WHO  MAY  REQUIRE  THAT,  AT THE TIME OF SUCH ISSUANCE, CONSIDERATION BE
DISTRIBUTED TO MEMBERS.  FOR PURPOSES OF THE FIFTY-ONE  PERCENT  LIMITA-
TION,  ANY  ISSUED AND OUTSTANDING SECURITIES OF THE REORGANIZED INSURER
OR ANY STOCK HOLDING COMPANY THAT  ARE  CONVERTIBLE  INTO  VOTING  STOCK
SHALL BE CONSIDERED ISSUED AND OUTSTANDING VOTING STOCK.
  (B)  A MUTUAL HOLDING COMPANY AND ANY STOCK HOLDING COMPANY SHALL EACH
BE DEEMED TO BE A "HOLDING COMPANY" OF THE  REORGANIZED  INSURER  WITHIN
THE  MEANING  OF  ARTICLE FIFTEEN OF THIS CHAPTER, AND ALL PROVISIONS OF
ARTICLE FIFTEEN OF THIS CHAPTER SHALL APPLY  TO  TRANSACTIONS  OCCURRING
BETWEEN  THE  MUTUAL  HOLDING COMPANY, THE STOCK HOLDING COMPANY AND THE
REORGANIZED INSURER. APPROVAL OF  THE  PLAN  OF  REORGANIZATION  BY  THE
SUPERINTENDENT PURSUANT TO THIS ARTICLE SHALL CONSTITUTE APPROVAL OF THE
ACQUISITION OF CONTROL BY A MUTUAL HOLDING COMPANY AND ANY STOCK HOLDING
COMPANY UNDER SECTION ONE THOUSAND FIVE HUNDRED SIX OF THIS CHAPTER, THE

S. 4191--B                         14

REGISTRATION  BY  THE  REORGANIZED INSURER AS A CONTROLLED INSURER UNDER
SECTION ONE THOUSAND FIVE HUNDRED THREE OF THIS CHAPTER  AND  NOTICE  OF
THE  ACQUISITION OF SHARES OF THE REORGANIZED INSURER UNDER SECTION FOUR
THOUSAND TWO HUNDRED THREE OF THIS CHAPTER.
  (C)  OUTSIDE  DIRECTORS OF THE MUTUAL HOLDING COMPANY, A STOCK HOLDING
COMPANY OR THE REORGANIZED INSURER SHALL NOT OWN  BENEFICIALLY,  IN  THE
AGGREGATE,  MORE  THAN  THREE  PERCENT  OF THE VOTING STOCK OF THE STOCK
HOLDING COMPANY OR THE REORGANIZED INSURER.
  (D) IN NO EVENT SHALL ANY PERSON, DIRECTLY  OR  INDIRECTLY,  OFFER  TO
ACQUIRE  OR  ACQUIRE  IN  ANY  MANNER  BENEFICIAL OWNERSHIP OF MORE THAN
FIFTEEN PERCENT OF ANY CLASS OF VOTING  SECURITIES  OF  THE  REORGANIZED
INSURER,  ANY  STOCK HOLDING COMPANY OR ANY OTHER INSTITUTION WHICH OWNS
DIRECTLY OR INDIRECTLY A MAJORITY OR ALL OF THE VOTING SECURITIES OF THE
REORGANIZED INSURER WITHOUT THE PRIOR APPROVAL OF THE SUPERINTENDENT.
  (E) ANY ISSUANCE OF VOTING STOCK OR SECURITIES CONVERTIBLE INTO VOTING
STOCK OR OPTIONS FOR THE PURCHASE OF VOTING  STOCK  OF  THE  REORGANIZED
INSURER  OR  THE STOCK HOLDING COMPANY PRIOR TO AN INITIAL PUBLIC OFFER-
ING, PRIVATE EQUITY PLACEMENT, OR THE  ISSUANCE  OF  PUBLIC  OR  PRIVATE
VOTING STOCK OR SECURITIES CONVERTIBLE INTO VOTING STOCK OF THE REORGAN-
IZED  INSURER  OR  STOCK  HOLDING  COMPANY  OR ANY OTHER TYPE OF CAPITAL
RAISED SHALL BE SUBJECT TO THE APPROVAL OF THE SUPERINTENDENT AS TO  THE
PROPOSED  VALUATION  OF SUCH STOCK OR SECURITIES, THE SUPERINTENDENT MAY
IMPOSE CONDITIONS UPON SUCH APPROVAL, AND ALL  EXPENSES  OF  THE  SUPER-
INTENDENT'S  REVIEW,  INCLUDING  WITHOUT  LIMITATION  THOSE  OF  OUTSIDE
CONSULTANTS IN REVIEWING SUCH PROPOSED VALUATION, SHALL BE BORNE BY  THE
ISSUING COMPANY.
  (F) IN THE EVENT OF AN INITIAL PUBLIC OFFERING, A STOCK HOLDING COMPA-
NY  OR  REORGANIZED  INSURER MAY NOT REPURCHASE CAPITAL STOCK WITHIN ONE
YEAR FOLLOWING THE DATE OF SUCH INITIAL  PUBLIC  OFFERING,  EXCEPT  THAT
REPURCHASES OF NO GREATER THAN FIVE PERCENT OF THE OUTSTANDING STOCK MAY
BE  REPURCHASED  DURING THIS ONE YEAR PERIOD WITHOUT THE APPROVAL OF THE
SUPERINTENDENT.
  (G) IN THE EVENT OF ANY VIOLATION OF THIS SECTION, OR  OF  ANY  ACTION
WHICH, IF CONSUMMATED, MIGHT CONSTITUTE SUCH A VIOLATION:
  (L)  ALL  VOTING  STOCK  OF THE REORGANIZED INSURER, ANY STOCK HOLDING
COMPANY, OR THE REORGANIZED MUTUAL  HOLDING  COMPANY,  ACQUIRED  BY  ANY
PERSON  IN EXCESS OF THE MAXIMUM AMOUNT PERMITTED TO BE ACQUIRED BY SUCH
PERSON PURSUANT TO THIS SUBSECTION SHALL  BE  DEEMED  TO  BE  NON-VOTING
STOCK; AND
  (2) IN ADDITION TO ANY OTHER ENFORCEMENT POWERS OF THE SUPERINTENDENT,
UNDER  THIS  CHAPTER,  SUCH  VIOLATION  OR  ACTION  MAY  BE  ENFORCED OR
ENJOINED, AS THE CASE MAY BE, BY  APPROPRIATE  PROCEEDING  COMMENCED  ON
BEHALF  OF  THE  REORGANIZED  INSURER,  ANY STOCK HOLDING COMPANY OR, IF
APPLICABLE, A REORGANIZED MUTUAL HOLDING  COMPANY,  BY  THE  REORGANIZED
INSURER,  THE  STOCK  HOLDING COMPANY, THE MUTUAL HOLDING COMPANY OR THE
SUPERINTENDENT, THE ATTORNEY GENERAL, ANY MEMBER OF THE  MUTUAL  HOLDING
COMPANY  OR, IF APPLICABLE, A REORGANIZED MUTUAL HOLDING COMPANY, OR ANY
STOCKHOLDER OF THE REORGANIZED INSURER, ANY STOCK HOLDING COMPANY OR THE
REORGANIZED MUTUAL HOLDING COMPANY IN THE SUPREME COURT IN THE  JUDICIAL
DISTRICT  IN WHICH THE REORGANIZED INSURER HAS ITS HOME OFFICE OR IN ANY
OTHER COURT HAVING JURISDICTION, AND SUCH COURT  MAY  ISSUE  ANY  ORDER,
INJUNCTIVE OR OTHERWISE, IT FINDS NECESSARY TO CURE SUCH VIOLATION OR TO
PREVENT SUCH ACTION.
  S  8019.    CONVERSION OF MUTUAL HOLDING COMPANY. (A) A MUTUAL HOLDING
COMPANY MAY REORGANIZE IN ACCORDANCE WITH A PLAN OF REORGANIZATION WHICH
IS FAIR AND EQUITABLE TO THE COMPANY'S MEMBERS AND IS:

S. 4191--B                         15

  (1) ADOPTED BY ACTION OF THREE-FOURTHS OF ITS ENTIRE BOARD  OF  DIREC-
TORS;
  (2)  APPROVED  BY THE SUPERINTENDENT IF FOUND BY THE SUPERINTENDENT TO
BE FAIR AND EQUITABLE TO THE COMPANY'S MEMBERS AFTER A HEARING HELD UPON
NOTICE TO THE COMPANY'S MEMBERS; AND, THEREAFTER,
  (3) ADOPTED BY THE AFFIRMATIVE VOTE OF TWO-THIRDS OF ALL VOTES CAST BY
MEMBERS OF THE COMPANY ENTITLED TO VOTE, AFTER NOTICE BEING GIVEN TO ALL
MEMBERS ENTITLED TO VOTE. THE MUTUAL HOLDING COMPANY SHALL GIVE  WRITTEN
NOTICE  STATING  THE DATE, TIME AND PLACE FOR VOTING ON SUCH PROPOSAL TO
MEMBERS ENTITLED TO NOTICE OF AND TO VOTE ON THE PROPOSAL IN  ACCORDANCE
WITH  THIS  SECTION, SENT BY MAIL OR ELECTRONIC TRANSMISSION TO THE LAST
KNOWN MAILING OR ELECTRONIC ADDRESSES OF SUCH POLICYHOLDERS AS SHOWN  ON
THE  RECORDS OF THE MUTUAL HOLDING COMPANY. SUCH NOTICE SHALL BE SENT AT
LEAST THIRTY DAYS BEFORE THE DATE OF THE PROPOSED VOTE  TO  APPROVE  THE
PLAN  OF  REORGANIZATION. SUCH NOTICE MAY BE COMBINED WITH NOTICE OF THE
HEARING REQUIRED BY PARAGRAPH TWO OF THIS SUBSECTION. SUCH NOTICE  SHALL
BE PRECEDED OR ACCOMPANIED BY A TRUE AND CORRECT COPY OF THE PLAN, OR BY
A SUMMARY THEREOF APPROVED BY THE SUPERINTENDENT, AND SUCH OTHER EXPLAN-
ATORY INFORMATION AS THE SUPERINTENDENT SHALL APPROVE OR REQUIRE.
  (B)  A  PLAN  OF  REORGANIZATION  PURSUANT  TO  SUBSECTION (A) OF THIS
SECTION SHALL PROVIDE FOR THE MEMBERSHIP INTERESTS IN THE MUTUAL HOLDING
COMPANY BEING EXTINGUISHED AND MAY PROVIDE EITHER FOR:
  (1) THE CONVERSION OF THE MUTUAL HOLDING COMPANY INTO A  STOCK  CORPO-
RATION,  IN WHICH EVENT CONSIDERATION DISTRIBUTED SHALL BE EQUAL TO THAT
REQUIRED UNDER SECTION SEVEN THOUSAND THREE HUNDRED TWELVE OF THIS CHAP-
TER OR SUCH OTHER LAW  GOVERNING  THE  DEMUTUALIZATION  OF  MUTUAL  LIFE
INSURERS AS MAY THEN BE IN EFFECT; OR
  (2) THE DISTRIBUTION TO ELIGIBLE MEMBERS OF THE MUTUAL HOLDING COMPANY
OF  CONSIDERATION CONSISTING OF ALL ASSETS OF THE MUTUAL HOLDING COMPANY
INCLUDING ALL STOCK OF THE REORGANIZED  INSURER  OR  ANY  STOCK  HOLDING
COMPANY  OWNED  BY  THE  MUTUAL  HOLDING COMPANY, OR OTHER CONSIDERATION
HAVING EQUIVALENT AGGREGATE VALUE, WHICH MAY BE IN  THE  FORM  OF  CASH,
SECURITIES  OF ANY INSTITUTION, ADDITIONAL INSURANCE OR ANNUITY BENEFITS
OR POLICY CREDITS, INCREASED DIVIDENDS OR OTHER CONSIDERATION, ALL  SUCH
CONSIDERATION BEING ALLOCATED AMONG ELIGIBLE MEMBERS OF THE MUTUAL HOLD-
ING  COMPANY  IN  A  MANNER  THAT IS FAIR AND EQUITABLE TO THE COMPANY'S
MEMBERS.
  (C) IF NO CLOSED BLOCK OF PARTICIPATING  POLICIES  AND  CONTRACTS  WAS
ESTABLISHED  OR  ALTERNATIVE  PROVISION WAS APPROVED PURSUANT TO SECTION
EIGHT THOUSAND THREE OF THIS ARTICLE WHEN THE MUTUAL HOLDING COMPANY WAS
ESTABLISHED OR THEREAFTER, THEN THE PLAN OF REORGANIZATION OF THE MUTUAL
HOLDING COMPANY PURSUANT TO SUBSECTION (A) OF THIS SECTION SHALL PROVIDE
FOR THE ESTABLISHMENT OF SUCH A CLOSED BLOCK  OR  ALTERNATIVE  PROVISION
UPON  A REORGANIZATION OF THE MUTUAL HOLDING COMPANY UNDER THIS SECTION.
ANY SUCH CLOSED BLOCK OR ALTERNATIVE  PROVISIONS  SHALL  BE  SUBJECT  TO
SUBSECTION (B) OF SECTION EIGHT THOUSAND THREE OF THIS ARTICLE. HOWEVER,
IF  A  CLOSED  BLOCK  OF PARTICIPATING POLICIES AND CONTRACTS WAS ESTAB-
LISHED OR ALTERNATIVE PROVISION WAS APPROVED PURSUANT TO SUBSECTION  (B)
OF  SECTION EIGHT THOUSAND THREE OF THIS ARTICLE WHEN THE MUTUAL HOLDING
COMPANY WAS ESTABLISHED OR THEREAFTER, THEN  NO  SUCH  CLOSED  BLOCK  OR
ALTERNATIVE  PROVISION  SHALL  BE  REQUIRED UPON A REORGANIZATION OF THE
MUTUAL HOLDING COMPANY UNDER THIS SECTION.
  S 8020. TRANSFERS  OF  SUBSIDIARIES.  A  REORGANIZING  OR  REORGANIZED
INSURER  MAY  TRANSFER ANY ONE OR MORE OF ITS SUBSIDIARIES TO THE MUTUAL
HOLDING COMPANY OR TO ONE OR MORE PERSONS OWNED  OR  CONTROLLED  BY  THE
MUTUAL HOLDING COMPANY, PROVIDED THE REORGANIZING OR REORGANIZED INSURER

S. 4191--B                         16

OBTAINS  THE PRIOR APPROVAL OF THE SUPERINTENDENT. ANY SUCH TRANSFER MAY
BE MADE WITHOUT CONSIDERATION AS A DIVIDEND OR  FOR  CONSIDERATION  THAT
MAY  INCLUDE OBLIGATIONS OF THE MUTUAL HOLDING COMPANY OR OBLIGATIONS OR
PREFERRED  SHARES  OF A PERSON OWNED OR CONTROLLED BY THE MUTUAL HOLDING
COMPANY. THE SUPERINTENDENT SHALL APPROVE EACH SUCH PROPOSED TRANSFER IF
THE SUPERINTENDENT FINDS IT IS FAIR AND EQUITABLE.  FOR  A  REORGANIZING
INSURER,  THE PLAN MAY PROVIDE FOR SUCH TRANSFER, IN WHICH CASE APPROVAL
OF THE PLAN SHALL CONSTITUTE APPROVAL BY THE SUPERINTENDENT PURSUANT  TO
THIS  SECTION. THE PROVISIONS OF SECTIONS ONE THOUSAND FIVE HUNDRED FIVE
AND FOUR THOUSAND TWO HUNDRED SEVEN OF THIS CHAPTER SHALL NOT  APPLY  TO
ANY TRANSFER OF SUBSIDIARIES EFFECTED PURSUANT TO THIS SECTION BUT SHALL
OTHERWISE APPLY TO THE REORGANIZED INSURER AND ITS AFFILIATES IN ACCORD-
ANCE  WITH  THEIR TERMS. THE PROVISION OF SUBPARAGRAPH (II) OF PARAGRAPH
TWO OF SUBSECTION (A) OF SECTION ONE THOUSAND FOUR HUNDRED FIVE OF  THIS
CHAPTER LIMITING THE AGGREGATE AMOUNT OF INVESTMENTS IN PREFERRED SHARES
OF  AMERICAN INSTITUTIONS SHALL NOT APPLY TO AN INVESTMENT BY A REORGAN-
IZING OR REORGANIZED INSURER IN SUCH PREFERRED SHARES RECEIVED BY IT  IN
CONSIDERATION FOR A TRANSFER PURSUANT TO THIS SECTION. FOR A REORGANIZED
INSURER,  THE OTHER PROVISIONS OF THIS ARTICLE, INCLUDING, WITHOUT LIMI-
TATION, THE REQUIREMENT OF FILING A PLAN OF  REORGANIZATION,  SHALL  NOT
APPLY TO THE TRANSFER OF SUBSIDIARIES PURSUANT TO THIS SECTION.
  S  8021.  LIMITATIONS  ON  ACCUMULATION  OF  SURPLUS OF MUTUAL HOLDING
COMPANIES. (A) A MUTUAL HOLDING COMPANY MAY MAINTAIN (1) A NON-INSURANCE
SURPLUS NOT EXCEEDING THE AGGREGATE CAPITAL AND SURPLUS OF ITS INSURANCE
SUBSIDIARIES AND (2) AGGREGATE CAPITAL  AND  SURPLUS  OF  ITS  INSURANCE
SUBSIDIARIES  NOT  EXCEEDING  THE SURPLUS LIMIT OF ITS INSURANCE SUBSID-
IARIES, UNLESS OTHERWISE APPROVED BY THE SUPERINTENDENT.
  (B) AS USED IN THIS  SECTION,  THE  FOLLOWING  TERMS  SHALL  HAVE  THE
FOLLOWING MEANINGS:
  (1)  "NON-INSURANCE  SURPLUS"  MEANS  THE MUTUAL HOLDING COMPANY'S NET
WORTH, DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRIN-
CIPLES ON A CONSOLIDATED BASIS, EXCLUDING THE  PORTION  THEREOF  DERIVED
FROM ITS INTEREST IN ITS INSURANCE SUBSIDIARIES.
  (2)  "INSURANCE  SUBSIDIARY"  MEANS A SUBSIDIARY OF THE MUTUAL HOLDING
COMPANY THAT IS A DOMESTIC INSURER, A FOREIGN INSURER, AN ALIEN  INSURER
OR  (NOTWITHSTANDING  ITS  EXEMPTION FROM THIS CHAPTER) A HEALTH MAINTE-
NANCE ORGANIZATION.
  (3) "AGGREGATE CAPITAL AND SURPLUS"  OF  A  MUTUAL  HOLDING  COMPANY'S
INSURANCE SUBSIDIARIES MEANS THE SUM OF:
  (A)  FOR EACH SUBSIDIARY THAT IS A LIFE INSURANCE COMPANY AND IS NOT A
SUBSIDIARY OF ANOTHER LIFE INSURANCE COMPANY, ITS STATUTORY CAPITAL  AND
SURPLUS;
  (B) FOR EACH SUBSIDIARY THAT IS AN INSURANCE COMPANY OTHER THAN A LIFE
INSURANCE  COMPANY, A HEALTH MAINTENANCE ORGANIZATION OR A SUBSIDIARY OF
ANOTHER INSURANCE SUBSIDIARY, ITS STATUTORY CAPITAL AND SURPLUS; AND
  (C) FOR EACH SUBSIDIARY THAT IS A HEALTH MAINTENANCE ORGANIZATION  AND
IS  NOT  A SUBSIDIARY OF AN INSURANCE SUBSIDIARY, THIRTY-FIVE PERCENT OF
ITS NET PREMIUM WRITTEN IN THE PRECEDING CALENDAR YEAR.
  (4) "SURPLUS LIMIT" OF A MUTUAL HOLDING  COMPANY'S  INSURANCE  SUBSID-
IARIES MEANS THE AGGREGATE OF:
  (A)  FOR EACH SUBSIDIARY THAT IS A LIFE INSURANCE COMPANY AND IS NOT A
SUBSIDIARY OF ANOTHER LIFE INSURANCE COMPANY, THE GREATER OF  (I)  EIGHT
HUNDRED  FIFTY  THOUSAND  DOLLARS,  OR  (II)  TEN  PERCENT OF ITS POLICY
RESERVES AND POLICY LIABILITIES, OR (III)  TEN  PERCENT  OF  THE  POLICY
RESERVES  AND  POLICY  LIABILITIES OF SUCH LIFE INSURANCE COMPANY AND OF
ALL SUBSIDIARIES OF SUCH COMPANY THAT ARE INSURANCE COMPANIES, PLUS  (X)

S. 4191--B                         17

THE  PRODUCT  OF THREE AND THE AUTHORIZED CONTROL LEVEL RBC OF SUCH LIFE
INSURANCE COMPANY AS DETERMINED IN ACCORDANCE WITH SECTION ONE  THOUSAND
THREE  HUNDRED TWENTY-TWO OF THIS CHAPTER OR CORRESPONDING PROVISIONS OF
THE  LAW  OF ITS STATE OF DOMICILE, PLUS (Y) FOR EACH SUBSIDIARY OF SUCH
DOMESTIC LIFE INSURANCE COMPANY THAT IS A HEALTH  MAINTENANCE  ORGANIZA-
TION,  THIRTY-FIVE  PERCENT  OF ITS NET PREMIUM WRITTEN IN THE PRECEDING
CALENDAR YEAR, MINUS (Z) THE  ASSET  VALUATION  RESERVES  OF  SUCH  LIFE
INSURANCE  COMPANY AND OF ALL SUBSIDIARIES OF SUCH COMPANY THAT ARE LIFE
INSURANCE COMPANIES, OR (IV) THE MINIMUM AMOUNT OF CAPITAL  AND  SURPLUS
REQUIRED BY THE LAW OF ANOTHER STATE IN WHICH SUCH LIFE INSURANCE COMPA-
NY  IS  AUTHORIZED  TO DO BUSINESS, ALL AS DETERMINED IN ACCORDANCE WITH
ACCOUNTING PRACTICES PRESCRIBED OR PERMITTED BY THE  SUPERINTENDENT,  IN
THE  CASE OF DOMESTIC INSURERS, OR THE PRINCIPAL REGULATOR OF ANY INSUR-
ANCE SUBSIDIARY THAT IS NOT A DOMESTIC INSURER;
  (B) FOR EACH SUBSIDIARY THAT IS AN INSURANCE COMPANY OTHER THAN A LIFE
INSURANCE COMPANY, A HEALTH MAINTENANCE ORGANIZATION OR A SUBSIDIARY  OF
ANOTHER INSURANCE SUBSIDIARY, ITS STATUTORY CAPITAL AND SURPLUS; AND
  (C)  FOR EACH SUBSIDIARY THAT IS A HEALTH MAINTENANCE ORGANIZATION AND
IS NOT A SUBSIDIARY OF AN INSURANCE SUBSIDIARY, THIRTY-FIVE  PERCENT  OF
ITS NET PREMIUM WRITTEN IN THE PRECEDING CALENDAR YEAR;
  (D)  THE  SUPERINTENDENT  MAY,  FOR GOOD CAUSE SHOWN, BY ORDER, PERMIT
SUCH MUTUAL HOLDING COMPANY TO MAINTAIN A SURPLUS IN EXCESS OF THE MAXI-
MUM PRESCRIBED BY SUBSECTION (A) OF THIS SECTION, FOR A SPECIFIED  PERI-
OD, NOT EXCEEDING ONE YEAR UNDER ANY ONE ORDER. THE SUPERINTENDENT SHALL
STATE  IN SUCH ORDER THE REASONS THEREFOR AND SHALL CAUSE A STATEMENT OF
SUCH ORDER AND SUCH REASONS TO BE PUBLISHED IN THE NEXT ANNUAL REPORT OF
THE SUPERINTENDENT TO THE LEGISLATURE.
  S 2. This act shall take effect immediately.

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