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This entry was published on 2014-09-22
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SECTION 7305
Conversion of assessment corporations into advance premium corporations
Insurance (ISC) CHAPTER 28, ARTICLE 73
§ 7305. Conversion of assessment corporations into advance premium
corporations. Any assessment corporation, as defined in section six
thousand six hundred two of this chapter, licensed under section six
thousand six hundred three of this chapter to do the business of fire
insurance may be converted into and licensed as an advance premium
corporation, as defined in section six thousand six hundred two of this
chapter, in the manner prescribed in this section and subject to any
other requirements of law. The successive steps shall be as follows:

(a) A majority of the board of such assessment corporation shall adopt
a resolution approving the proposed conversion and appointing a
committee of not less than three directors to prepare a draft of a
proposed declaration and charter and proposed by-laws.

(b) Such committee's proposed declaration, charter and by-laws shall
be submitted with an appropriate resolution to the board of directors
for approval.

(c) A majority of the board at any regular or special meeting thereof
shall approve by resolution a proposed declaration and charter and
proposed by-laws, which shall conform to the requirements of this
chapter relative to the contents of charters and by-laws of advance
premium corporations hereafter organized, with such modifications as the
superintendent, by regulation, shall prescribe to make such requirements
applicable to the nature and character of such conversion proceeding.
Such resolution shall also direct that notice that the proposed
conversion will be submitted for approval at the next annual meeting of
members or at a special meeting to be called for that purpose be given
to all members pursuant to section six hundred five of the business
corporation law, together with copies of the resolutions referred to in
subsections (a) and (b) hereof and in this subsection, and of the
proposed declaration, charter and by-laws.

(d) At least two-thirds of the votes of the members voting at such
meeting either in person or by proxy, if the corporation's by-laws
provide for a vote by proxy, shall be cast in favor of the proposed
conversion and of the adoption of the proposed declaration and charter
and proposed by-laws. A resolution shall similarly be adopted
instructing the president and secretary to execute or certify and file
all necessary papers and instruments incident to the proposed
conversion.

(e) The proposed declaration and charter executed by the president and
secretary, together with copies of all other necessary papers and
instruments incident to the proposed conversion, subscribed and affirmed
by each as true under the penalties of perjury, shall be submitted to
the superintendent.

(f) If the superintendent finds, by such investigation or examination
as he deems appropriate to make, that the corporation meets the minimum
surplus requirements of section six thousand six hundred four of this
chapter, he shall file in his office the declaration, charter, by-laws
and other documents submitted as required by subsection (e) hereof, and
coincident with such filing such assessment corporation shall become an
advance premium corporation. For an assessment corporation initially
licensed to do business in this state prior to July first, nineteen
hundred eighty-two such minimum surplus requirements and minimum capital
investment requirements shall be those applicable to an advance premium
corporation initially licensed to do business in this state prior to
such date.

(g) Upon compliance by the corporation with the foregoing and with any
other lawful prerequisites for the issuance of an insurer's license, the
superintendent may, in accordance with subsection (d) of section one
thousand one hundred two of this chapter, grant a license to such
advance premium corporation to do the kinds of insurance business
specified in its charter. The territory in which such corporation shall
be licensed shall be that for which it was licensed when an assessment
corporation immediately prior to its conversion as herein provided, but
if it has a surplus of at least one hundred fifty thousand dollars it
may be licensed by the superintendent to do business throughout the
state, subject to the requirements of section six thousand six hundred
ten of this chapter and to all the provisions and requirements of this
article relative to advance premium corporations.