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This entry was published on 2014-09-22
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SECTION 7306
Conversion of advance premium corporations or assessment corporations into mutual property/casualty insurance companies
Insurance (ISC) CHAPTER 28, ARTICLE 73
§ 7306. Conversion of advance premium corporations or assessment
corporations into mutual property/casualty insurance companies. Any
advance premium corporation or assessment corporation, as defined in
section six thousand six hundred two of this chapter, which has in force
contracts of insurance of the kinds which domestic mutual
property/casualty insurance companies, as defined in subsection (a) of
section one hundred seven of this chapter, may be authorized to do,
covering not less than three hundred separate risks and on which the
premiums in force or the most recent annual assessment aggregates not
less than one hundred thousand dollars, may be converted into and
licensed as a domestic mutual property/casualty insurance company 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 directors of the 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, charter and by-laws.

(b) The proposed declaration, charter and by-laws shall be submitted
with an appropriate resolution to the board for its approval.

(c) A majority of the board at any regular or special meeting thereof
shall approve by resolution the proposed declaration, charter and
by-laws, which shall conform to the requirements of this chapter
relative to the contents of charters and by-laws of domestic mutual
property/casualty insurance companies hereafter organized, with such
additions as the superintendent shall approve to accommodate insurance
contracts then in force. 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 mailed, with postage prepaid, to all members at their last
known post office addresses respectively, at least thirty days prior to
the date of the meeting, together with copies of the resolutions
provided for in subsections (a) and (b) hereof and this subsection and
of the proposed declaration, charter and by-laws.

(d) At least two-thirds of the votes of 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 proof of mailing of notice of members' meeting
and copies of all other necessary papers and instruments incident to the
proposed conversion, together with a certificate of their adoption as
provided for herein, subscribed and affirmed by such officers 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 initial
surplus and reserve requirements for domestic mutual fire insurance
companies organized and licensed immediately before July first, nineteen
hundred eighty-two, to do the kinds of insurance business for which the
corporation is to be licensed, and complies with all other provisions of
this section, he shall approve the declaration and charter and by-laws
and file the same together with the other documents submitted as
required by subsection (e) hereof in his office, and coincident with
such filing such advance premium corporation or assessment corporation
shall become a domestic mutual property/casualty insurance company.

(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 mutual
property/casualty insurance company. Such corporation shall thereafter
be subject to all the provisions and requirements of this chapter
relative to mutual property/casualty insurance companies.