senate Bill S4191B

Signed By Governor
2013-2014 Legislative Session

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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Archive: Last Bill Status - Signed by Governor


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Nov 13, 2013 signed chap.500
Nov 01, 2013 delivered to governor
Jun 18, 2013 returned to senate
passed assembly
ordered to third reading rules cal.329
substituted for a6448b
Jun 10, 2013 referred to codes
delivered to assembly
passed senate
Jun 03, 2013 amended on third reading 4191b
May 29, 2013 amended on third reading 4191a
Mar 20, 2013 advanced to third reading
Mar 19, 2013 2nd report cal.
Mar 18, 2013 1st report cal.208
Mar 13, 2013 referred to insurance

Votes

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Bill Amendments

Original
A
B (Active)
Original
A
B (Active)

Co-Sponsors

S4191 - Bill Details

See Assembly Version of this Bill:
A6448B
Law Section:
Insurance Law
Laws Affected:
Add Art 80 §§8001 - 8021, Ins L

S4191 - Bill Texts

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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 NUMBER:S4191

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
reorganization 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 superintendent of financial services
including the holding of a public hearing; 4) the process for
policyholder review and voting on a reorganization 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 company, 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
regulation, 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
mutual 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 competition. 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 subsidiaries of the
mutual life insurer, and this structure limits the size of
acquisitions because subsidiaries are subject to a 30%
risk-based-capital 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.
Demutualization (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 involving 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 alternative, 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 insurer 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 subsidiary. Such a reorganization would not affect
the obligations of the reorganizing insurer. All insurance obligations
of the reorganizing insurer stay intact. Policyholder/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 holding company. Policyholder/members would
continue to control the reorganized 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 subsidiary. 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 individual 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
policyholders.

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 decisions affecting the capital structure 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 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
issuance 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 reorganized 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 reorganized 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
holding 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
reorganization 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.

PRIOR LEGISLATIVE HISTORY: {}

FISCAL IMPLICATIONS:

None.


EFFECTIVE DATE:

Immediately.

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

                                  4191

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                             March 13, 2013
                               ___________

Introduced  by  Sen.  LIBOUS -- read twice and ordered printed, and when
  printed to be committed to the Committee on Insurance

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.
        8013. NOTICE OF PROPOSED REORGANIZATION.
        8014. FAILURE TO GIVE NOTICE.
        8015. LIMITATIONS OF ACTIONS; SECURITY.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09843-01-3

S. 4191                             2

        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.
        8022. CONFIDENTIALITY.
  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;
  (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-

S. 4191                             3

ING  COMPANY  OR  ANY STOCK HOLDING COMPANY, INCLUDING ANY INTEREST IN A
COMPANY SPONSORED PURSUANT TO SUBSECTION (J) OF SECTION  EIGHT  THOUSAND
EIGHTEEN OF THIS ARTICLE; 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 OR 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
THAN SECURITIES HAVING SUCH POWER ONLY BY REASON OF THE HAPPENING  OF  A
CONTINGENCY.

S. 4191                             4

  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 LESS THAN SEVENTY-FIVE PERCENT  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:
  (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
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-

S. 4191                             5

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
OF A THREE-FOURTHS MAJORITY OF ITS ENTIRE BOARD OF DIRECTORS, AMEND  THE
PLAN  OF  REORGANIZATION  OR WITHDRAW THE PLAN OF REORGANIZATION. IN THE

S. 4191                             6

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. HOWEVER, THE REORGANIZING INSURER MAY INSTEAD GIVE
NOTICE OF THE HEARING BY PUBLICATION IN A NEWSPAPER  OF  GENERAL  CIRCU-
LATION IN THE COUNTY IN WHICH THE REORGANIZING INSURER HAS ITS PRINCIPAL
OFFICE  AND  IN  EITHER OF THE TWO LARGEST CITIES IN EACH STATE IN WHICH
THE REORGANIZING INSURER SHALL BE LICENSED  TO  DO  BUSINESS.  THE  DATE
SPECIFIED FOR THE HEARING SHALL BE NOT LESS THAN TEN NOR MORE THAN THIR-
TY  DAYS  FROM  THE  DATE  ON WHICH THE NOTICE OF THE HEARING IS SENT OR
PUBLISHED. NOTICE OF HEARING SHALL STATE THE PURPOSE THEREOF,  THE  TIME
WHEN  AND  THE  PLACE WHERE THE PUBLIC HEARING WILL BE HELD. 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
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

S. 4191                             7

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
NOTICE OF THE HEARING REQUIRED BY SECTION EIGHT THOUSAND SEVEN  OF  THIS
ARTICLE.  SUCH  NOTICE  SHALL BE PRECEDED   OR ACCOMPANIED BY A TRUE AND
CORRECT COPY OF THE PLAN, OR BY A SUMMARY THEREOF APPROVED BY THE SUPER-
INTENDENT, AND SUCH OTHER EXPLANATORY INFORMATION AS THE  SUPERINTENDENT
SHALL  APPROVE OR REQUIRE. HOWEVER, THE REORGANIZING INSURER MAY INSTEAD
GIVE NOTICE BY PUBLICATION IN A NEWSPAPER OF GENERAL CIRCULATION IN  THE
COUNTY IN WHICH THE REORGANIZING INSURER HAS ITS PRINCIPAL OFFICE AND IN
EITHER OF THE TWO LARGEST CITIES IN EACH STATE IN WHICH THE REORGANIZING
INSURER  SHALL  BE  LICENSED  TO  DO BUSINESS, PROVIDED, HOWEVER, THAT A
FULL, TRUE AND CORRECT COPY OF SUCH PROPOSED  AGREEMENT,  OR  A  SUMMARY
THEREOF  APPROVED  BY  THE  SUPERINTENDENT,  SHALL  BE  INCLUDED IN SUCH
NOTICE. SUCH PUBLISHED NOTICE MAY BE COMBINED WITH PUBLISHED  NOTICE  OF
THE  HEARING  CONTEMPLATED BY SECTION EIGHT THOUSAND SEVEN OF THIS ARTI-
CLE.
  (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 ENTITLE 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.

S. 4191                             8

  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 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-

S. 4191                             9

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-
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 REASONS OF SUCH REORGANIZATION,  BUT  THE  SAME  MAY  BE
PROSECUTED 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  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

S. 4191                            10

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
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
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  TWENTY  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 BE INADEQUATE
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:

S. 4191                            11

(1) THE APPROVAL OF A  PLAN  OF  REORGANIZATION  BY  THE  SUPERINTENDENT
PURSUANT  TO  SECTION  EIGHT  THOUSAND SEVEN OR EIGHT THOUSAND TWENTY OF
THIS ARTICLE, AS THE CASE MAY BE; OR (2) THE APPROVAL OF THE SUPERINTEN-
DENT PURSUANT TO SECTION EIGHT THOUSAND TWENTY-ONE OF THIS ARTICLE.
  (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
TWENTY  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;

S. 4191                            12

  (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
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 PURSUANT TO SUBSECTION (G) OF THIS SECTION,  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

S. 4191                            13

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.
  (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) IF THE MUTUAL HOLDING COMPANY MERGES WITH A MUTUAL HOLDING COMPANY
ORGANIZED  UNDER  THE  LAWS  OF ANOTHER STATE OR ACQUIRES THE MEMBERSHIP
INTERESTS IN A FOREIGN NATURAL LIFE INSURER, SUCH MERGER OR  ACQUISITION
SHALL COMPLY WITH THE  REQUIREMENTS OF NEW YORK LAW OR REGULATION AND OF
ANY  LAW OR REGULATION WHICH IS APPLICABLE TO THE FOREIGN MUTUAL HOLDING
COMPANY OR MUTUAL LIFE INSURER, EITHER MUTUAL HOLDING COMPANY MAY BE THE
SURVIVING CORPORATION, AND THE SUBSIDIARIES OF THE FOREIGN MUTUAL  HOLD-
ING  COMPANY  NEED  NOT, BY REASON OF THE MERGER, BECOME LICENSED IN NEW
YORK OR OTHERWISE SUBJECT TO THIS CHAPTER. IN THE EVENT OF A CONFLICT OF
STATE LAWS AND REGULATIONS NEW YORK LAWS AND REGULATIONS SHALL APPLY.  A
FOREIGN MUTUAL LIFE INSURER WHICH IS MERGED OR ACQUIRED PURSUANT TO THIS
SECTION  MAY  AT  THE SAME TIME REDOMESTICATE TO THIS STATE BY COMPLYING
WITH THE APPLICABLE REQUIREMENTS OF THIS STATE AND OF ITS STATE OF DOMI-
CILE.
  (H) A MUTUAL HOLDING COMPANY MAY ALSO REQUIRE  THE  CAPITAL  STOCK  OR
ASSETS OF OTHER PERSONS.
  (I)  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.
  (J)  A  MEMBERSHIP  INTEREST  IN  A  MUTUAL  HOLDING COMPANY SHALL NOT
CONSTITUTE A SECURITY UNDER THE LAWS OF THIS STATE.
  (K) THE SUPERINTENDENT SHALL RETAIN JURISDICTION OVER ANY MUTUAL HOLD-
ING COMPANY ORGANIZED PURSUANT TO THIS ARTICLE.
  (L) 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

S. 4191                            14

COMPANY  AND  TO  OTHER  PERSONS  SECURITIES,  INCLUDING  VOTING  STOCK,
NON-VOTING STOCK AND SECURITIES CONVERTIBLE INTO  VOTING  OR  NON-VOTING
STOCK,  PROVIDED  THAT,  AFTER  GIVING  EFFECT  TO SUCH ISSUANCE, IN THE
AGGREGATE  THE  ISSUED  AND  OUTSTANDING VOTING STOCK OF THE REORGANIZED
INSURER HELD, DIRECTLY OR THROUGH ONE OR MORE STOCK  HOLDING  COMPANIES,
BY  THE MUTUAL HOLDING COMPANY IS NOT LESS THAN FIFTY-ONE PERCENT OF THE
ISSUED AND OUTSTANDING VOTING STOCK  OF  THE  REORGANIZED  INSURER.  FOR
PURPOSES  OF  THIS  LIMITATION, ANY ISSUED AND OUTSTANDING SECURITIES OF
THE REORGANIZED INSURER OR ANY STOCK HOLDING COMPANY THAT ARE  CONVERTI-
BLE  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
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)  UNTIL SIX MONTHS AFTER THE COMPLETION OF EITHER AN INITIAL PUBLIC
OFFERING, PRIVATE EQUITY PLACEMENT OR THE FIRST ISSUANCE  OF  PUBLIC  OR
PRIVATE  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 A
STOCK HOLDING COMPANY NOR THE REORGANIZED INSURER SHALL 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  REORGANIZED
INSURER.
  (D)  UNTIL  TWO  YEARS  AFTER  THE  SIX  MONTH  PERIOD  REFERRED TO IN
SUBSECTION (C) OF THIS SECTION, 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 STOCK HOLDING COMPANY OR THE REORGANIZED  INSUR-
ER.
  (E)  THE OFFICERS AND DIRECTORS OF THE MUTUAL HOLDING COMPANY, A STOCK
HOLDING COMPANY OR THE REORGANIZED INSURER SHALL NOT  OWN  BENEFICIALLY,
IN  THE AGGREGATE, MORE THAN EIGHTEEN PERCENT OF THE VOTING STOCK OF THE
STOCK HOLDING COMPANY OR THE  REORGANIZED  INSURER,  PROVIDED  THAT  THE
SUPERINTENDENT MAY, IN THE EVENT OF A DISTRESS SITUATION FIND THAT BENE-
FICIAL  OWNERSHIP  OF MORE THAN EIGHTEEN PERCENT IS NECESSARY AND APPRO-
PRIATE.
  (F) 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.
  (G)  IN  NO  EVENT  SHALL ANY PERSON, DIRECTLY OR INDIRECTLY, OFFER TO
ACQUIRE OR ACQUIRE IN ANY  MANNER  BENEFICIAL  OWNERSHIP  OR  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.

S. 4191                            15

  (H) 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 SHALL BE SUBJECT TO THE APPROVAL  OF  THE  SUPER-
INTENDENT  AS  TO THE PROPOSED VALUATION OF SUCH STOCK OR SECURITIES AND
ALL EXPENSES OF THE SUPERINTENDENT'S REVIEW, INCLUDING  WITHOUT  LIMITA-
TION  THOSE OF OUTSIDE CONSULTANTS IN REVIEWING SUCH PROPOSED VALUATION,
SHALL BE BORNE BY THE ISSUING COMPANY.
  (I) ANY VOTING STOCK OR SECURITIES CONVERTIBLE INTO VOTING STOCK  HELD
BY OFFICERS AND DIRECTORS OF THE MUTUAL HOLDING COMPANY, THE STOCK HOLD-
ING  COMPANY  AND THE REORGANIZED INSURER SHALL NOT BE SOLD FOR A PERIOD
OF AT LEAST ONE YEAR FOLLOWING THE DATE OF PURCHASE OR ISSUANCE, OR FROM
THE DATE OF THE INITIAL OFFERING OF SUCH SECURITIES, EXCEPT IN THE EVENT
OF DEATH OF SUCH OFFICER OR DIRECTOR.
  (J) NOTHING IN THIS SECTION SHALL PREVENT THE MUTUAL HOLDING  COMPANY,
THE  STOCK HOLDING COMPANY OR THE REORGANIZED INSURER FROM ISSUING STOCK
OF THE STOCK HOLDING COMPANY OR  THE  REORGANIZED  INSURER  TO  A  TRUST
ESTABLISHED IN CONNECTION WITH AN EMPLOYEE STOCK OWNERSHIP PLAN OR OTHER
EMPLOYEE  BENEFIT  PLANS ESTABLISHED FOR THE BENEFIT OF THE EMPLOYEES OF
THE MUTUAL HOLDING COMPANY, THE STOCK HOLDING COMPANY AND  THE  REORGAN-
IZED  INSURER AND QUALIFIED UNDER THE INTERNAL REVENUE CODE. NO INDIVID-
UAL MAY BE ALLOCATED MORE THAN TWELVE AND ONE-HALF PERCENT OF THE INTER-
EST IN ANY SUCH PLAN AND DIRECTORS WHO ARE NOT EMPLOYEES  SHALL  NOT  BE
ALLOCATED  MORE  THAN TWO AND ONE-HALF PERCENT OF THE INTERESTS INDIVID-
UALLY OR FIFTEEN PERCENT IN THE AGGREGATE OF ANY PLAN BUT  IN  NO  EVENT
SHALL  ANY  INDIVIDUAL  EXCEED  THE LIMITATION ON OWNERSHIP CONTAINED IN
SUBSECTIONS (E) AND (F) OF THIS SECTION. EMPLOYEE STOCK OWNERSHIP  PLANS
OR OTHER EMPLOYEE BENEFIT PLANS, IN THE AGGREGATE, SHALL NOT EXCEED FIVE
PERCENT OF THE SHARES INITIALLY ISSUED.
  (K) 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.
  (L) 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,

S. 4191                            16

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:
  (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  OR  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  OR  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

S. 4191                            17

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
OBTAINS THE PRIOR APPROVAL OF THE SUPERINTENDENT. ANY SUCH TRANSFER  MAY
BE MADE WITHOUT CONSIDERATION AS A DIVIDED 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 CLAUSE  (II)  OF  ITEM  (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 INVEST-
MENT BY A REORGANIZING 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, INCLUD-
ING, WITHOUT LIMITATION, THE REQUIREMENT OF FILING A PLAN OF REORGANIZA-
TION,  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.

S. 4191                            18

  (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)
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
ACCOUNT  PRACTICES PRESCRIBED OR PERMITTED BY THE SUPERINTENDENT, IN THE
CASE OF DOMESTIC INSURERS, OR THE PRINCIPAL REGULATOR OF  ANY  INSURANCE
SUBSIDIARY THAT IS NOT A DOMESTIC INSURER;
  (B)  FOR EACH SUBSIDIARY THAT IS A 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 8022. CONFIDENTIALITY. NOTWITHSTANDING ANY OTHER  PROVISION  OF  THE
LAW,  ALL  COMMUNICATIONS,  INFORMATION  AND  DOCUMENTS  OBTAINED  BY OR
DISCLOSED TO THE SUPERINTENDENT OR ANY DEPUTY OR EMPLOYEE OF THE DEPART-
MENT OR ITS CONSULTANTS PURSUANT TO THIS ARTICLE SHALL BE KEPT CONFIDEN-
TIAL, SHALL NOT BE SUBJECT TO SUBPOENA AND SHALL NOT BE MADE  PUBLIC  BY
THE  SUPERINTENDENT  OR  ANY DEPUTY OR EMPLOYEE OF THE DEPARTMENT OR ITS
CONSULTANTS OR ANY OTHER PERSON WITHOUT THE PRIOR WRITTEN CONSENT OF THE
MUTUAL HOLDING COMPANY, ANY  STOCK  HOLDING  COMPANY,  THE  REORGANIZING
INSURER  OR  THE  REORGANIZED INSURER, UNLESS AND TO THE EXTENT THAT THE
SUPERINTENDENT, AFTER GIVING THE REORGANIZED  INSURER  AND  ANY  OF  ITS
AFFILIATES  THAT  COULD BE AFFECTED THEREBY NOTICE AND AN OPPORTUNITY TO
BE HEARD, DETERMINES THAT SPECIFIC INFORMATION OR DOCUMENTS  ARE  NECES-
SARY FOR POLICYHOLDERS OR MEMBERS OF THE MUTUAL HOLDING COMPANY TO PROP-
ERLY  EVALUATE  THE  PROPOSED REORGANIZATION, CONVERSION OR OTHER TRANS-
ACTION UNDER THIS ARTICLE AND SHOULD THEREFORE BE DISCLOSED.
  S 2. This act shall take effect immediately.

Co-Sponsors

S4191A - Bill Details

See Assembly Version of this Bill:
A6448B
Law Section:
Insurance Law
Laws Affected:
Add Art 80 §§8001 - 8021, Ins L

S4191A - Bill Texts

view 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.

view sponsor memo
BILL NUMBER:S4191A

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 5196 of the reorganized mutual life insurer.

SUMMARY OF SPECIFIC PROVISIONS:

Adds a new Article 80 to the Insurance Law providing for the
reorganization 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 SO 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 superintendent of financial services
including the holding of a public hearing; 4) the process for
policyholder review and voting on a reorganization 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 company, 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
regulation, 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
mutual 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 competition. 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 subsidiaries of the
mutual life insurer, and this structure limits the size of
acquisitions because subsidiaries are subject to a 30%-
risk-based-capital 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.
Demutualiration (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 involving 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 alternative, 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 insurer ox 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 subsidiary. Such a reorganization would not affect
the obligations of the reorganizing insurer. All insurance obligations
of the reorganizing insurer stay intact. Policyholder/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 holding company. Policyholder/members would
continue to control the reorganized 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 subsidiary. 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 75b 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 individual 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
policyholders.

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 fox making decisions affecting the capital structure 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 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
issuance 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 reorganized 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 reorganized 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
holding 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
reorganization 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.

PRIOR LEGISLATIVE HISTORY:

FISCAL IMPLICATIONS:

None.


EFFECTIVE DATE:

Immediately.

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

                                 4191--A
    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

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.
        8013. NOTICE OF PROPOSED REORGANIZATION.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09843-02-3

S. 4191--A                          2

        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;
  (2) WHO DOES NOT DIRECTLY OR  INDIRECTLY  OWN,  CONTROL  OR  HOLD  ONE
PERCENT  OR GREATER OF THE VOTING SECURITIES OF ANY STOCK HOLDING COMPA-

S. 4191--A                          3

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 OR 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
THAN SECURITIES HAVING SUCH POWER ONLY BY REASON OF THE HAPPENING  OF  A
CONTINGENCY.

S. 4191--A                          4

  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
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-

S. 4191--A                          5

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
OF A THREE-FOURTHS MAJORITY OF ITS ENTIRE BOARD OF DIRECTORS, AMEND  THE
PLAN  OF  REORGANIZATION  OR WITHDRAW THE PLAN OF REORGANIZATION. IN THE

S. 4191--A                          6

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
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

S. 4191--A                          7

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 ENTITLE 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 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

S. 4191--A                          8

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-
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.

S. 4191--A                          9

  (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  REASONS  OF  SUCH  REORGANIZATION, BUT THE SAME MAY BE
PROSECUTED 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  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
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

S. 4191--A                         10

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 BE INADEQUATE
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.
  (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

S. 4191--A                         11

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
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

S. 4191--A                         12

  (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.
  (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:

S. 4191--A                         13

  (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 REQUIRE 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
REGISTRATION  BY  THE  REORGANIZED INSURER AS A CONTROLLED INSURER UNDER
SECTION ONE THOUSAND FIVE HUNDRED THREE OF THIS CHAPTER  AND  NOTICE  OF

S. 4191--A                         14

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 OR 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:
  (1) ADOPTED BY ACTION OF THREE-FOURTHS OF ITS ENTIRE BOARD  OF  DIREC-
TORS;

S. 4191--A                         15

  (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 OR 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
OBTAINS THE PRIOR APPROVAL OF THE SUPERINTENDENT. ANY SUCH TRANSFER  MAY
BE MADE WITHOUT CONSIDERATION AS A DIVIDED OR FOR CONSIDERATION THAT MAY

S. 4191--A                         16

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)
THE PRODUCT OF THREE AND THE AUTHORIZED CONTROL LEVEL RBC OF  SUCH  LIFE
INSURANCE  COMPANY AS DETERMINED IN ACCORDANCE WITH SECTION ONE THOUSAND

S. 4191--A                         17

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
ACCOUNT PRACTICES PRESCRIBED OR PERMITTED BY THE SUPERINTENDENT, IN  THE
CASE  OF  DOMESTIC INSURERS, OR THE PRINCIPAL REGULATOR OF ANY INSURANCE
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.

Co-Sponsors

S4191B (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A6448B
Law Section:
Insurance Law
Laws Affected:
Add Art 80 §§8001 - 8021, Ins L

S4191B (ACTIVE) - Bill Texts

view 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.

view 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.

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                    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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