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Assembly Actions -
Lowercase Senate Actions - UPPERCASE |
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|---|---|
| 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 18, 2013 |
substituted by s4191b |
| Jun 17, 2013 |
ordered to third reading rules cal.329 rules report cal.329 reported |
| Jun 12, 2013 |
reported referred to rules |
| May 31, 2013 |
print number 6448b |
| May 31, 2013 |
amend and recommit to codes |
| May 30, 2013 |
print number 6448a |
| May 30, 2013 |
amend and recommit to codes reported referred to codes |
| Apr 01, 2013 |
referred to insurance |
Assembly Bill A6448B
Signed By Governor2013-2014 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
download bill text pdfSponsored By
LUPARDO
Archive: Last Bill Status Via S4191 - Signed by Governor
- Introduced
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- In Committee Assembly
- In Committee Senate
-
- On Floor Calendar Assembly
- On Floor Calendar Senate
-
- Passed Assembly
- Passed Senate
- Delivered to Governor
- Signed By Governor
Actions
Votes
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Floor Vote: Jun 10, 2013
aye (62)- Adams
- Addabbo Jr.
- Avella
- Ball
- Bonacic
- Boyle
- Breslin
- Carlucci
- DeFrancisco
- Diaz
- Dilan
- Espaillat
- Farley
- Felder
- Flanagan
- Fuschillo
- Gallivan
- Gianaris
- Gipson
- Golden
- Griffo
- Grisanti
- Hannon
- Hassell-Thompson
- Hoylman-Sigal
- Kennedy
- Klein
- Krueger
- LaValle
- Lanza
- Larkin
- Latimer
- Libous
- Little
- Marcellino
- Marchione
- Maziarz
- Montgomery
- Nozzolio
- O'Brien
- O'Mara
- Parker
- Peralta
- Perkins
- Ranzenhofer
- Ritchie
- Rivera
- Robach
- Sampson
- Sanders Jr.
- Savino
- Serrano
- Seward
- Skelos
- Smith
- Squadron
- Stavisky
- Stewart-Cousins
- Tkaczyk
- Valesky
- Young
- Zeldin
excused (1)
-
Mar 18, 2013 - Insurance Committee Vote
S419117Aye0Nay2Aye with Reservations0Absent0Excused0Abstained -
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Bill Amendments
co-Sponsors
William A. Barclay
William Magnarelli
2013-A6448 - Details
- See Senate Version of this Bill:
- S4191
- Law Section:
- Insurance Law
- Laws Affected:
- Add Art 80 §§8001 - 8021, Ins L
2013-A6448 - Bill Text download pdf
S T A T E O F N E W Y O R K
________________________________________________________________________
6448
2013-2014 Regular Sessions
I N A S S E M B L Y
April 1, 2013
___________
Introduced by M. of A. LUPARDO -- read once and referred to the Commit-
tee 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
A. 6448 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-
A. 6448 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.
A. 6448 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-
A. 6448 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
A. 6448 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
A. 6448 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.
A. 6448 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-
A. 6448 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
A. 6448 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:
A. 6448 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;
A. 6448 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
A. 6448 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
A. 6448 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.
A. 6448 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,
A. 6448 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
A. 6448 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.
A. 6448 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
William A. Barclay
William Magnarelli
2013-A6448A - Details
- See Senate Version of this Bill:
- S4191
- Law Section:
- Insurance Law
- Laws Affected:
- Add Art 80 §§8001 - 8021, Ins L
2013-A6448A - Bill Text download pdf
S T A T E O F N E W Y O R K
________________________________________________________________________
6448--A
2013-2014 Regular Sessions
I N A S S E M B L Y
April 1, 2013
___________
Introduced by M. of A. LUPARDO, BARCLAY, MAGNARELLI -- read once and
referred to the Committee on Insurance -- reported and referred to the
Committee on Codes -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
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.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09843-03-3
A. 6448--A 2
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-
A. 6448--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.
A. 6448--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-
A. 6448--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
A. 6448--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
A. 6448--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
A. 6448--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.
A. 6448--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
A. 6448--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
A. 6448--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
A. 6448--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:
A. 6448--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
A. 6448--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;
A. 6448--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
A. 6448--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
A. 6448--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
William A. Barclay
William Magnarelli
2013-A6448B (ACTIVE) - Details
- See Senate Version of this Bill:
- S4191
- Law Section:
- Insurance Law
- Laws Affected:
- Add Art 80 §§8001 - 8021, Ins L
2013-A6448B (ACTIVE) - Bill Text download pdf
S T A T E O F N E W Y O R K
________________________________________________________________________
6448--B
2013-2014 Regular Sessions
I N A S S E M B L Y
April 1, 2013
___________
Introduced by M. of A. LUPARDO, BARCLAY, MAGNARELLI -- read once and
referred to the Committee on Insurance -- reported and referred to the
Committee on Codes -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee -- again
reported from said committee with amendments, ordered reprinted as
amended and recommitted to said committee
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.
LBD09843-05-3
A. 6448--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;
A. 6448--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
A. 6448--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
A. 6448--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
A. 6448--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
A. 6448--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.
A. 6448--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-
A. 6448--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
A. 6448--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.
A. 6448--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
A. 6448--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.
A. 6448--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
A. 6448--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:
A. 6448--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
A. 6448--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)
A. 6448--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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