CHAPTER 3. APPLICATION FOR CONVERSION
IC 27-15-3
Chapter 3. Application for Conversion
IC 27-15-3-1
Filing with commissioner
Sec. 1. After the adoption by the board of directors of theresolution proposing the plan of conversion under IC 27-15-2 and theamendment to its articles of incorporation, the converting mutualshall file with the commissioner an application for approval of theplan and amendment.
As added by P.L.94-1999, SEC.3.
IC 27-15-3-2
Content of application
Sec. 2. The application must contain the following information,together with such additional information as the commissioner mayrequire:
(1) The plan of conversion and a certificate of the secretary ofthe converting mutual certifying the adoption of the plan by theboard of directors.
(2) A statement of the reasons for the proposed conversion andwhy the conversion is in the best interests of the convertingmutual, the eligible members, and the other policyholders. Thestatement must include an analysis of the risks and benefits tothe converting mutual and its members of the proposedconversion and a comparison of the risks and benefits of theconversion with the risks and benefits of reasonable alternativesto a conversion.
(3) A five (5) year business plan and at least two (2) years offinancial projections of the former mutual and any parentcompany.
(4) Any plans that the former mutual or any parent companymay have to:
(A) raise additional capital through the issuance of stock orotherwise;
(B) sell or issue stock to any person, including anycompensation or benefit plan for directors, officers, oremployees under which stock may be issued;
(C) liquidate or dissolve any company or sell any materialassets;
(D) merge or consolidate or pursue any other form ofreorganization with any person; or
(E) make any other material change in investment policy,business, corporate structure, or management.
(5) Any plans for a delayed distribution of consideration toeligible members or restrictions on sale or transfer of stock orother securities.
(6) A copy of the form of trust agreement, if a distribution ofconsideration is to be delayed by more than six (6) months afterthe effective date of the conversion. (7) A plan of operation for a closed block, if a closed block isused for the preservation of the reasonable dividendexpectations of eligible members and other policyholders withpolicies that provide for the distribution of policy dividends.
(8) Copies of the amendment to the articles of incorporationproposed by the board of directors and the proposed bylaws ofthe former mutual and copies of the existing and any proposedarticles of incorporation and bylaws of any parent company.
(9) A list of all individuals who are or have been selected tobecome directors or officers of the former mutual and anyparent company, or the individuals who perform or will performduties customarily performed by a director or officer, and thefollowing information concerning each individual on the listunless the information is already on file with the commissioner:
(A) The individual's principal occupation.
(B) All offices and positions the individual has held in thepreceding five (5) years.
(C) Any crime of which the individual has been convicted(other than traffic violations) in the preceding ten (10) years.
(D) Information concerning any personal bankruptcy of theindividual or the individual's spouse during the previousseven (7) years.
(E) Information concerning the bankruptcy of anycorporation or other entity of which the individual was anofficer or director during the previous seven (7) years.
(F) Information concerning allegations of state or federalsecurities law violations made against the individual thatwithin the previous ten (10) years resulted in:
(i) a determination that the individual violated state orfederal securities law;
(ii) a plea of nolo contendere; or
(iii) a consent decree.
(G) Information concerning the suspension, revocation, orother disciplinary action during the previous ten (10) yearsof any state or federal license issued to the individual.
(H) Information as to whether the individual was refused abond during the previous ten (10) years.
(10) A fairness opinion addressed to the board of directors ofthe converting mutual from a qualified, independent financialadviser, asserting:
(A) that the provision of stock, cash, policy benefits, or otherforms of consideration upon the extinguishing of theconverting mutual's membership interests under the plan ofconversion and the amendment to the articles ofincorporation is fair to the eligible members, as a group,from a financial point of view; and
(B) whether the total consideration under clause (A) is equalto or greater than the surplus of the converting mutual.
(11) An actuarial opinion as to the following:
(A) The reasonableness and appropriateness of the
methodology or formulas used to allocate considerationamong eligible members, consistent with this article.
(B) The reasonableness of the plan of operation and thesufficiency of the assets allocated to the closed block, if aclosed block is used for the preservation of the reasonabledividend expectations of eligible members and otherpolicyholders with policies that provide for the distributionof policy dividends.
(12) If any of the consideration to be distributed to eligiblemembers consists of stock or other securities, a description ofthe plans made by the former mutual or its parent company toassure that an active public trading market for the stock or othersecurities will develop within a reasonable amount of time afterthe effective date of the plan of conversion and that eligiblemembers who receive stock or other securities will be able tosell their stock or other securities, subject to any delayeddistribution or transfer restrictions under this article, atreasonable cost and effort. The plans may consist of thefollowing:
(A) Appointing a registrar and transfer agent for the stock orother securities.
(B) Making filings, applications, or registrations for thestock or other securities with the federal Securities andExchange Commission and state securities commissioners.
(C) Listing the stock or other securities on a national orother securities exchange.
(D) Facilitating coverage of the stock or other securities byresearch analysts and securing the commitment of at leastone (1) market maker to make a market in the stock or othersecurities.
(E) Conducting an underwritten public offering of the sameclass of stock or other securities, promptly following theeffectiveness of the plan of conversion, in order to facilitatethe development of a public market.
(F) Making available a procedure for eligible membersholding small numbers or amounts of stock or othersecurities to sell their stock or other securities to the formermutual or a parent company at market value without thepayment of brokerage commissions or similar fees, or to selltheir stock or other securities in the market through a brokerwith discounted brokerage commissions or fees.
(13) Any additional information, documents, or materials thatthe converting mutual determines to be necessary.
(14) Any other additional information, documents, or materialsthat the commissioner requests in writing.
As added by P.L.94-1999, SEC.3.
IC 27-15-3-3
Content excepted from simple plan of conversion
Sec. 3. Notwithstanding section 2 of this chapter, the opinion
described in section 2(10) of this chapter is not required under thischapter if the converting mutual utilizes a simple plan of conversion.
As added by P.L.94-1999, SEC.3.
IC 27-15-3-4
Actuarial opinion requirements
Sec. 4. The actuarial opinion required by this chapter shall be:
(1) provided and signed by a qualified and independent actuarywho is a member of the American Academy of Actuaries;
(2) given in accordance with professional standards andpractices generally accepted by the actuarial profession andthose other factors as the actuary believes are reasonable andappropriate in the exercise of professional judgment at the timethe opinion is given;
(3) supported by a memorandum of the actuary, describing thecalculations made in support of the opinion and the assumptionsused in the calculations; and
(4) submitted to the commissioner.
As added by P.L.94-1999, SEC.3.