IC 27-14-5
Chapter 5. Restrictions on Capital and Other Stock
IC 27-14-5-1 MIHC to retain majority of voting stock
Sec. 1. After the effective date of the plan of reorganization, the
MIHC must at all times have the direct or indirect:
(1) power to cast at least fifty-one percent (51%) of the votes on
all matters submitted to a vote of the holders of common stock
(or any other class of stock entitled to vote generally on matters
submitted to security holders for a vote, including the election
of directors) of each reorganized insurer and any stock holding
company of the MIHC; and
(2) ownership of shares of stock entitled to:
(A) receipt of at least fifty-one percent (51%) of all
dividends declared on common stock of each reorganized
insurer and any stock holding company of the MIHC; and
(B) receipt of at least fifty-one percent (51%) of the net
proceeds to common stockholders upon any dissolution of
each reorganized insurer and any stock holding company of
the MIHC. As added by P.L.5-2000, SEC.4.
IC 27-14-5-2 Limits on aggregate number of shares owned by directors and
officers
Sec. 2. (a) As used in this section, "CPI adjustment" means the
percentage increase or decrease in the Consumer Price Index for
Urban Wage Earners and Clerical Workers published monthly by the
United States Bureau of Labor Statistics or any successor index
published by the United States, as of the end of each calendar year,
commencing January 1, 1999.
(b) The CPI adjustment referred to under subsection (c) shall be
made by the commissioner as of January 1, 2000, and each year
thereafter, based on the CPI adjustment for the preceding year.
(c) The aggregate number of shares of equity securities owned by
all of the directors and officers of the MIHC and its affiliates and
associates, excluding any shares acquired by or held for the benefit
of the officers and directors and their associates through an employee
benefit plan as permitted by IC 27-14-4-6(1) and section 5 of this
chapter, may not exceed the following:
(1) Fifteen percent (15%) of the total number of outstanding
shares of equity securities of each reorganized insurer and any
stock holding company if the total surplus of the MIHC and all
of its reorganized insurers is greater than one billion five
hundred million dollars ($1,500,000,000), as adjusted annually
by the CPI.
(2) Twenty percent (20%) of the total number of outstanding
shares of equity securities of each reorganized insurer and any
stock holding company if the total surplus of the MIHC and all
of its reorganized insurers is greater than seven hundred fifty
million dollars ($750,000,000), as adjusted annually by the CPI,
and less than or equal to one billion five hundred million dollars
($1,500,000,000), as adjusted annually by the CPI.
(3) Twenty-five percent (25%) of the total number of
outstanding shares of equity securities of each reorganized
insurer and any stock holding company if the total surplus of
the MIHC and all of this reorganized insurers is greater than
two hundred fifty million dollars ($250,000,000), as adjusted
annually by the CPI, and less than or equal to seven hundred
fifty million dollars ($750,000,000), as adjusted annually by the
CPI.
(4) Thirty percent (30%) of the total number of outstanding
shares of equity securities of each reorganized insurer and all of
its reorganized insurers is less than or equal to two hundred
fifty million dollars ($250,000,000), as adjusted annually by the
CPI. As added by P.L.5-2000, SEC.4.
IC 27-14-5-3 Limit on aggregate number of shares owned by single director or
officer
Sec. 3. The aggregate number of shares of equity securities owned
by:
(1) a single director or officer of the MIHC or any subsidiary of
the MIHC;
(2) associates of the person referred to in subdivision (1); and
(3) persons acting in concert with the person referred to in
subdivision (1) or (2);
may not exceed five percent (5%) of the total number of outstanding
shares of equity securities of each reorganized insurer and any stock
holding company excluding any equity securities acquired by or held
for the benefit of the officers and directors and their associates
through employee benefit plans as permitted by IC 27-14-4-6(1) and
section 5 of this chapter, but including any equity securities
beneficially owned by officers and directors and their associates
under employee benefit plans as provided in IC 27-14-4-6(2). As added by P.L.5-2000, SEC.4.
IC 27-14-5-4 Fees or commissions for issuance of stock prohibited
Sec. 4. A director, officer, agent, or employee of the MIHC or its
subsidiaries, or an associate of a director, an officer, an agent, or
employee, may not receive a fee, commission, or other valuable
consideration for aiding, promoting, or assisting in the issuance of
stock under this section, except for:
(1) compensation as provided for in the plan and approved by
the commissioner;
(2) the person's usual, regular salary or compensation; or
(3) reasonable fees and compensation paid to an individual who
is an attorney, accountant, actuary, or financial adviser for
services performed in the individual's independent practice,
even if the individual is also a director, an officer, an agent, or
an employee of the MIHC or its subsidiaries. As added by P.L.5-2000, SEC.4.
IC 27-14-5-5 Limit on aggregate number of shares owned by employee benefit
plan
Sec. 5. The aggregate number of shares of stock that may be
purchased or held by an employee benefit plan may not exceed ten
percent (10%) of the total number of outstanding shares of a
reorganized insurer or any stock holding company. As added by P.L.5-2000, SEC.4.
IC 27-14-5-6 Only publicly traded stock to be issued to directors or officers
Sec. 6. A reorganized insurer or stock holding company may not
issue stock to directors or officers, or both, except stock of a class
that is publicly traded. As added by P.L.5-2000, SEC.4.
IC 27-14-5-7 Stock option or sale of stock below fair market value as
compensation of officer or director prohibited
Sec. 7. A reorganized insurer or stock holding company may not:
(1) grant stock purchase options or warrants, or otherwise use
securities to provide compensation to directors or officers, or
both, at a price less than the fair market value of the security on
the date of the grant; or
(2) sell securities to directors or officers, or both, at a price less
than the fair market value of the security (except under the
exercise of authorized stock options consistent with subdivision
(1) and section 8 of this chapter). As added by P.L.5-2000, SEC.4.
IC 27-14-5-8 Stock purchase options for directors or officers prohibited until six
months after public trading begins
Sec. 8. A reorganized insurer or stock holding company may not
grant stock purchase options to directors or officers, or both, until at
least six (6) months after public trading for the stock has begun. As added by P.L.5-2000, SEC.4.
IC 27-14-5-9 Factors in determining compliance with ownership restrictions
Sec. 9. (a) For purposes of determining compliance with
ownership restrictions in this chapter, a person to whom a stock
purchase option or warrant has been granted under this chapter is not
considered to own the underlying securities until the stock purchase
option or warrant is exercised and the securities have been issued.
(b) An increase in a person's percentage ownership of securities
does not constitute a violation of the securities ownership restrictions
in this chapter if the increase in percentage ownership results solely
from a decrease in the aggregate number of securities outstanding.
(c) An inadvertent ownership of securities that exceeds the
securities ownership limitations in this chapter does not violate this
chapter if:
(1) a sufficient number of securities are divested within thirty
(30) days after the limitation was first known to be exceeded so
that the limitation is no longer exceeded; and
(2) during the period when the limitation is known to have been
exceeded, the owner of the securities:
(A) does not vote any securities in excess of the limitation;
and
(B) does not accept a dividend in respect of any securities
that exceed the limitations. As added by P.L.5-2000, SEC.4.
IC 27-14-5
Chapter 5. Restrictions on Capital and Other Stock
IC 27-14-5-1 MIHC to retain majority of voting stock
Sec. 1. After the effective date of the plan of reorganization, the
MIHC must at all times have the direct or indirect:
(1) power to cast at least fifty-one percent (51%) of the votes on
all matters submitted to a vote of the holders of common stock
(or any other class of stock entitled to vote generally on matters
submitted to security holders for a vote, including the election
of directors) of each reorganized insurer and any stock holding
company of the MIHC; and
(2) ownership of shares of stock entitled to:
(A) receipt of at least fifty-one percent (51%) of all
dividends declared on common stock of each reorganized
insurer and any stock holding company of the MIHC; and
(B) receipt of at least fifty-one percent (51%) of the net
proceeds to common stockholders upon any dissolution of
each reorganized insurer and any stock holding company of
the MIHC. As added by P.L.5-2000, SEC.4.
IC 27-14-5-2 Limits on aggregate number of shares owned by directors and
officers
Sec. 2. (a) As used in this section, "CPI adjustment" means the
percentage increase or decrease in the Consumer Price Index for
Urban Wage Earners and Clerical Workers published monthly by the
United States Bureau of Labor Statistics or any successor index
published by the United States, as of the end of each calendar year,
commencing January 1, 1999.
(b) The CPI adjustment referred to under subsection (c) shall be
made by the commissioner as of January 1, 2000, and each year
thereafter, based on the CPI adjustment for the preceding year.
(c) The aggregate number of shares of equity securities owned by
all of the directors and officers of the MIHC and its affiliates and
associates, excluding any shares acquired by or held for the benefit
of the officers and directors and their associates through an employee
benefit plan as permitted by IC 27-14-4-6(1) and section 5 of this
chapter, may not exceed the following:
(1) Fifteen percent (15%) of the total number of outstanding
shares of equity securities of each reorganized insurer and any
stock holding company if the total surplus of the MIHC and all
of its reorganized insurers is greater than one billion five
hundred million dollars ($1,500,000,000), as adjusted annually
by the CPI.
(2) Twenty percent (20%) of the total number of outstanding
shares of equity securities of each reorganized insurer and any
stock holding company if the total surplus of the MIHC and all
of its reorganized insurers is greater than seven hundred fifty
million dollars ($750,000,000), as adjusted annually by the CPI,
and less than or equal to one billion five hundred million dollars
($1,500,000,000), as adjusted annually by the CPI.
(3) Twenty-five percent (25%) of the total number of
outstanding shares of equity securities of each reorganized
insurer and any stock holding company if the total surplus of
the MIHC and all of this reorganized insurers is greater than
two hundred fifty million dollars ($250,000,000), as adjusted
annually by the CPI, and less than or equal to seven hundred
fifty million dollars ($750,000,000), as adjusted annually by the
CPI.
(4) Thirty percent (30%) of the total number of outstanding
shares of equity securities of each reorganized insurer and all of
its reorganized insurers is less than or equal to two hundred
fifty million dollars ($250,000,000), as adjusted annually by the
CPI. As added by P.L.5-2000, SEC.4.
IC 27-14-5-3 Limit on aggregate number of shares owned by single director or
officer
Sec. 3. The aggregate number of shares of equity securities owned
by:
(1) a single director or officer of the MIHC or any subsidiary of
the MIHC;
(2) associates of the person referred to in subdivision (1); and
(3) persons acting in concert with the person referred to in
subdivision (1) or (2);
may not exceed five percent (5%) of the total number of outstanding
shares of equity securities of each reorganized insurer and any stock
holding company excluding any equity securities acquired by or held
for the benefit of the officers and directors and their associates
through employee benefit plans as permitted by IC 27-14-4-6(1) and
section 5 of this chapter, but including any equity securities
beneficially owned by officers and directors and their associates
under employee benefit plans as provided in IC 27-14-4-6(2). As added by P.L.5-2000, SEC.4.
IC 27-14-5-4 Fees or commissions for issuance of stock prohibited
Sec. 4. A director, officer, agent, or employee of the MIHC or its
subsidiaries, or an associate of a director, an officer, an agent, or
employee, may not receive a fee, commission, or other valuable
consideration for aiding, promoting, or assisting in the issuance of
stock under this section, except for:
(1) compensation as provided for in the plan and approved by
the commissioner;
(2) the person's usual, regular salary or compensation; or
(3) reasonable fees and compensation paid to an individual who
is an attorney, accountant, actuary, or financial adviser for
services performed in the individual's independent practice,
even if the individual is also a director, an officer, an agent, or
an employee of the MIHC or its subsidiaries. As added by P.L.5-2000, SEC.4.
IC 27-14-5-5 Limit on aggregate number of shares owned by employee benefit
plan
Sec. 5. The aggregate number of shares of stock that may be
purchased or held by an employee benefit plan may not exceed ten
percent (10%) of the total number of outstanding shares of a
reorganized insurer or any stock holding company. As added by P.L.5-2000, SEC.4.
IC 27-14-5-6 Only publicly traded stock to be issued to directors or officers
Sec. 6. A reorganized insurer or stock holding company may not
issue stock to directors or officers, or both, except stock of a class
that is publicly traded. As added by P.L.5-2000, SEC.4.
IC 27-14-5-7 Stock option or sale of stock below fair market value as
compensation of officer or director prohibited
Sec. 7. A reorganized insurer or stock holding company may not:
(1) grant stock purchase options or warrants, or otherwise use
securities to provide compensation to directors or officers, or
both, at a price less than the fair market value of the security on
the date of the grant; or
(2) sell securities to directors or officers, or both, at a price less
than the fair market value of the security (except under the
exercise of authorized stock options consistent with subdivision
(1) and section 8 of this chapter). As added by P.L.5-2000, SEC.4.
IC 27-14-5-8 Stock purchase options for directors or officers prohibited until six
months after public trading begins
Sec. 8. A reorganized insurer or stock holding company may not
grant stock purchase options to directors or officers, or both, until at
least six (6) months after public trading for the stock has begun. As added by P.L.5-2000, SEC.4.
IC 27-14-5-9 Factors in determining compliance with ownership restrictions
Sec. 9. (a) For purposes of determining compliance with
ownership restrictions in this chapter, a person to whom a stock
purchase option or warrant has been granted under this chapter is not
considered to own the underlying securities until the stock purchase
option or warrant is exercised and the securities have been issued.
(b) An increase in a person's percentage ownership of securities
does not constitute a violation of the securities ownership restrictions
in this chapter if the increase in percentage ownership results solely
from a decrease in the aggregate number of securities outstanding.
(c) An inadvertent ownership of securities that exceeds the
securities ownership limitations in this chapter does not violate this
chapter if:
(1) a sufficient number of securities are divested within thirty
(30) days after the limitation was first known to be exceeded so
that the limitation is no longer exceeded; and
(2) during the period when the limitation is known to have been
exceeded, the owner of the securities:
(A) does not vote any securities in excess of the limitation;
and
(B) does not accept a dividend in respect of any securities
that exceed the limitations. As added by P.L.5-2000, SEC.4.
IC 27-14-5
Chapter 5. Restrictions on Capital and Other Stock
IC 27-14-5-1 MIHC to retain majority of voting stock
Sec. 1. After the effective date of the plan of reorganization, the
MIHC must at all times have the direct or indirect:
(1) power to cast at least fifty-one percent (51%) of the votes on
all matters submitted to a vote of the holders of common stock
(or any other class of stock entitled to vote generally on matters
submitted to security holders for a vote, including the election
of directors) of each reorganized insurer and any stock holding
company of the MIHC; and
(2) ownership of shares of stock entitled to:
(A) receipt of at least fifty-one percent (51%) of all
dividends declared on common stock of each reorganized
insurer and any stock holding company of the MIHC; and
(B) receipt of at least fifty-one percent (51%) of the net
proceeds to common stockholders upon any dissolution of
each reorganized insurer and any stock holding company of
the MIHC. As added by P.L.5-2000, SEC.4.
IC 27-14-5-2 Limits on aggregate number of shares owned by directors and
officers
Sec. 2. (a) As used in this section, "CPI adjustment" means the
percentage increase or decrease in the Consumer Price Index for
Urban Wage Earners and Clerical Workers published monthly by the
United States Bureau of Labor Statistics or any successor index
published by the United States, as of the end of each calendar year,
commencing January 1, 1999.
(b) The CPI adjustment referred to under subsection (c) shall be
made by the commissioner as of January 1, 2000, and each year
thereafter, based on the CPI adjustment for the preceding year.
(c) The aggregate number of shares of equity securities owned by
all of the directors and officers of the MIHC and its affiliates and
associates, excluding any shares acquired by or held for the benefit
of the officers and directors and their associates through an employee
benefit plan as permitted by IC 27-14-4-6(1) and section 5 of this
chapter, may not exceed the following:
(1) Fifteen percent (15%) of the total number of outstanding
shares of equity securities of each reorganized insurer and any
stock holding company if the total surplus of the MIHC and all
of its reorganized insurers is greater than one billion five
hundred million dollars ($1,500,000,000), as adjusted annually
by the CPI.
(2) Twenty percent (20%) of the total number of outstanding
shares of equity securities of each reorganized insurer and any
stock holding company if the total surplus of the MIHC and all
of its reorganized insurers is greater than seven hundred fifty
million dollars ($750,000,000), as adjusted annually by the CPI,
and less than or equal to one billion five hundred million dollars
($1,500,000,000), as adjusted annually by the CPI.
(3) Twenty-five percent (25%) of the total number of
outstanding shares of equity securities of each reorganized
insurer and any stock holding company if the total surplus of
the MIHC and all of this reorganized insurers is greater than
two hundred fifty million dollars ($250,000,000), as adjusted
annually by the CPI, and less than or equal to seven hundred
fifty million dollars ($750,000,000), as adjusted annually by the
CPI.
(4) Thirty percent (30%) of the total number of outstanding
shares of equity securities of each reorganized insurer and all of
its reorganized insurers is less than or equal to two hundred
fifty million dollars ($250,000,000), as adjusted annually by the
CPI. As added by P.L.5-2000, SEC.4.
IC 27-14-5-3 Limit on aggregate number of shares owned by single director or
officer
Sec. 3. The aggregate number of shares of equity securities owned
by:
(1) a single director or officer of the MIHC or any subsidiary of
the MIHC;
(2) associates of the person referred to in subdivision (1); and
(3) persons acting in concert with the person referred to in
subdivision (1) or (2);
may not exceed five percent (5%) of the total number of outstanding
shares of equity securities of each reorganized insurer and any stock
holding company excluding any equity securities acquired by or held
for the benefit of the officers and directors and their associates
through employee benefit plans as permitted by IC 27-14-4-6(1) and
section 5 of this chapter, but including any equity securities
beneficially owned by officers and directors and their associates
under employee benefit plans as provided in IC 27-14-4-6(2). As added by P.L.5-2000, SEC.4.
IC 27-14-5-4 Fees or commissions for issuance of stock prohibited
Sec. 4. A director, officer, agent, or employee of the MIHC or its
subsidiaries, or an associate of a director, an officer, an agent, or
employee, may not receive a fee, commission, or other valuable
consideration for aiding, promoting, or assisting in the issuance of
stock under this section, except for:
(1) compensation as provided for in the plan and approved by
the commissioner;
(2) the person's usual, regular salary or compensation; or
(3) reasonable fees and compensation paid to an individual who
is an attorney, accountant, actuary, or financial adviser for
services performed in the individual's independent practice,
even if the individual is also a director, an officer, an agent, or
an employee of the MIHC or its subsidiaries. As added by P.L.5-2000, SEC.4.
IC 27-14-5-5 Limit on aggregate number of shares owned by employee benefit
plan
Sec. 5. The aggregate number of shares of stock that may be
purchased or held by an employee benefit plan may not exceed ten
percent (10%) of the total number of outstanding shares of a
reorganized insurer or any stock holding company. As added by P.L.5-2000, SEC.4.
IC 27-14-5-6 Only publicly traded stock to be issued to directors or officers
Sec. 6. A reorganized insurer or stock holding company may not
issue stock to directors or officers, or both, except stock of a class
that is publicly traded. As added by P.L.5-2000, SEC.4.
IC 27-14-5-7 Stock option or sale of stock below fair market value as
compensation of officer or director prohibited
Sec. 7. A reorganized insurer or stock holding company may not:
(1) grant stock purchase options or warrants, or otherwise use
securities to provide compensation to directors or officers, or
both, at a price less than the fair market value of the security on
the date of the grant; or
(2) sell securities to directors or officers, or both, at a price less
than the fair market value of the security (except under the
exercise of authorized stock options consistent with subdivision
(1) and section 8 of this chapter). As added by P.L.5-2000, SEC.4.
IC 27-14-5-8 Stock purchase options for directors or officers prohibited until six
months after public trading begins
Sec. 8. A reorganized insurer or stock holding company may not
grant stock purchase options to directors or officers, or both, until at
least six (6) months after public trading for the stock has begun. As added by P.L.5-2000, SEC.4.
IC 27-14-5-9 Factors in determining compliance with ownership restrictions
Sec. 9. (a) For purposes of determining compliance with
ownership restrictions in this chapter, a person to whom a stock
purchase option or warrant has been granted under this chapter is not
considered to own the underlying securities until the stock purchase
option or warrant is exercised and the securities have been issued.
(b) An increase in a person's percentage ownership of securities
does not constitute a violation of the securities ownership restrictions
in this chapter if the increase in percentage ownership results solely
from a decrease in the aggregate number of securities outstanding.
(c) An inadvertent ownership of securities that exceeds the
securities ownership limitations in this chapter does not violate this
chapter if:
(1) a sufficient number of securities are divested within thirty
(30) days after the limitation was first known to be exceeded so
that the limitation is no longer exceeded; and
(2) during the period when the limitation is known to have been
exceeded, the owner of the securities:
(A) does not vote any securities in excess of the limitation;
and
(B) does not accept a dividend in respect of any securities
that exceed the limitations. As added by P.L.5-2000, SEC.4.
