IC 27-3 ARTICLE 3. CONSOLIDATIONS AND
REORGANIZATION
IC 27-3-1
Chapter 1. Exchange of Securities
IC 27-3-1-1 Construction and application
Sec. 1. This chapter shall be supplemental to IC 27-1. All
provisions of IC 27-1 shall be fully and completely applicable to this
chapter in the same manner as if the provisions of this chapter had
been an original part of IC 27-1; provided, that the provisions of this
chapter shall be controlling in the event there exists any conflict
between the provisions of this chapter and the provisions of IC 27-1. (Formerly: Acts 1967, c.61, s.1.) As amended by P.L.252-1985,
SEC.138.
IC 27-3-1-2 Authority to adopt plan of exchange
Sec. 2. Any domestic stock insurance company (referred to in this
chapter as the "domestic company") may adopt a plan of exchange
providing for the exchange by its shareholders of their stock in the
domestic company for:
(i) shares of stock issued by any other stock insurance
corporation organized or reorganized under the provisions of
IC 27-1 or any statute enacted prior to March 8, 1935, or any
stock corporation organized under the provisions of IC 23-1 or
any foreign stock corporation (such other corporation is referred
to in this chapter as the "acquiring corporation");
(ii) other securities issued by the acquiring corporation;
(iii) cash;
(iv) other consideration; or
(v) any combination of such stock, such other securities, cash,
or other consideration. (Formerly: Acts 1967, c.61, s.2.) As amended by P.L.252-1985,
SEC.139.
IC 27-3-1-3 Manner of adoption of plan of exchange; approvals; compensation
of dissenting shareholders
Sec. 3. (a) Subject to section 2 of this chapter, any domestic
company may adopt a plan of exchange with any acquiring
corporation providing for the exchange of the outstanding stock of
the domestic company for shares of stock or other securities issued
by the acquiring corporation or cash or other consideration, or any
combination, in the following manner. The boards of directors of the
domestic company and of the acquiring corporation by resolutions
approved by a majority of the whole of each board shall adopt a plan
of exchange that sets forth the terms and conditions of the exchange
and the mode of carrying the terms and conditions into effect and
other provisions with respect to the exchange as may be deemed
necessary or desirable.
(b) The domestic company and the acquiring corporation shall
submit to the insurance commissioner three (3) copies of the plan of
exchange certified by an officer of each as having been adopted in
accordance with subsection (a). The copies of the plan of exchange
shall be accompanied by financial statements of the domestic
company for its last preceding fiscal year prepared pursuant to
IC 27-1-20-21, pro forma financial statements of each corporation
based on the assumption that the plan of exchange was effective as
proposed at the end of the last preceding fiscal year of the domestic
company, an estimate of expenses already incurred and of expenses
expected to be incurred in connection with the proposed plan of
exchange, and a written statement that sets forth for each corporation
the proposed changes, if any, in management policies and in the
identity of officers and directors of the domestic company and of the
acquiring corporation that are initially contemplated if the plan of
exchange is effected as proposed. The insurance commissioner shall
hold a hearing upon the fairness of the terms, conditions, and
provisions of the plan of exchange and the proposed exchange of
stock or other securities of the acquiring corporation or cash or other
consideration or any combination thereof for the stock of the
domestic company at which the policyholders and the shareholders
of both the domestic company and the acquiring corporation and any
other interested party may appear and to become party to the
proceeding. The commissioner shall require the domestic company
and the acquiring corporation to produce evidence as the
commissioner considers necessary to establish the foregoing,
including evidence concerning the valuation of the respective
companies and the method utilized by the management of each
corporation to accomplish the valuation, inclusive of the value
established with respect to the stock of the domestic company that is
proposed to be exchanged as well as the value of the stock,
securities, and consideration other than cash to be offered by the
acquiring corporation in the exchange. The hearing shall be
commenced not less than twenty (20) days after the date on which
the plan of exchange is presented to the commissioner. The hearing
shall be held in Indianapolis, Indiana, at a place, date, and time
specified by the insurance commissioner. Notice of the hearing shall
be published in a newspaper of general circulation in the city where
the principal office of the domestic company and of the acquiring
corporation are located and Indianapolis once a week for two (2)
successive weeks. Written notice of the hearing shall be mailed at
least ten (10) days before the hearing by the domestic company and
by the acquiring corporation to all of their respective shareholders.
All expenses of publication shall be borne by the domestic company
or the acquiring corporation, or both, as specified in the plan of
exchange. Except as otherwise provided in this section, the hearing
and the determination are subject to IC 4-21.5-3. The commissioner
shall issue an order approving the plan of exchange as delivered to
the commissioner by the domestic company and the acquiring
corporation and the modifications approved by a majority of the
whole board of directors of each corporation if the commissioner
finds:
(1) that the plan, including all modifications, if effected, will
not tend adversely to affect the financial stability or
management of the domestic company or the general capacity
or intention to continue the safe and prudent transaction of the
insurance business of the domestic company, or of the acquiring
corporation, if it is a domestic insurance company;
(2) that the interests of the policyholders and shareholders of
the domestic company, and, if the acquiring corporation is a
domestic insurance company, the policyholders of the acquiring
corporation are protected;
(3) that the fulfillment of the plan will not affect either the
contractual obligations of the domestic company and of the
acquiring corporation, if it is a domestic insurance company, to
its policyholders or the ability and tendency of either to render
service to its policyholders in the future; and
(4) that the terms and conditions of the plan of exchange and
the proposed issuance and exchange are fair and reasonable.
The order of the commissioner approving or disapproving the plan
of exchange shall be filed in the department within sixty (60) days
after the date the plan of exchange is presented to the commissioner.
The department shall give notice of the order in the manner
prescribed in IC 4-21.5-3 to all parties to the proceeding, and the
department shall endorse the commissioner's approval or disapproval
on the plan of exchange in the manner provided in IC 27-1-6-8 and
shall deliver copies to the domestic company and to the acquiring
corporation. Any party to the proceeding aggrieved by the order are
entitled to a judicial review of the order in accordance with
IC 4-21.5-5.
(c) The plan of exchange as approved by the insurance
commissioner shall then be submitted to a vote of the shareholders
of the domestic company at an annual or special meeting of the
shareholders. Notice of the submission of the plan to the
shareholders shall be included in the notice of the annual or special
meeting. The shareholders entitled to vote in respect of the plan may
vote in person or by proxy, and each shareholder has one (1) vote for
each share of voting stock held by the shareholder. Jointly owned
shares may only be voted jointly. The plan shall be approved by the
shareholders of the domestic company upon receiving the affirmative
votes representing two thirds (2/3) of the outstanding capital stock of
the domestic company or a larger proportion as may be specified in
the plan of exchange. Notwithstanding shareholder adoption of the
plan of exchange and at any time before the filing of the certificate
setting forth the plan of exchange by the department, pursuant to
section 4 of this chapter, the plan of exchange may be abandoned
pursuant to a provision for abandonment, if any, contained in the
plan of exchange.
(d) Within ten (10) days after the plan of exchange is adopted by
the shareholders of the domestic company, a written notice of the
adoption of the plan of exchange shall be mailed or delivered
personally to each shareholder of record of the company who was
entitled to vote on the plan. The domestic company shall file with the
department an affidavit of the secretary or an assistant secretary of
the company or of an officer of the transfer agent of the company
that the notice was given.
(e) Any shareholder of the domestic company owning shares not
voted in favor of the plan at the meeting at which the plan was
approved by the shareholders of the domestic company may object
in writing to the plan and demand payment, should the plan become
effective, of the fair value of any shares as of the day on which the
plan of exchange was approved by the shareholders of the domestic
company pursuant to subsection (c). The objection and demand must
be received, together with the certificate or certificates representing
the shares with respect to which objection and demand have been
made for notation that the objection and demand have been made, by
the domestic company or its transfer agent within thirty (30) days
after the date of the meeting of shareholders. The objection and
demand may not pertain to any shares that were voted in favor of the
plan. Objection and demand can only be made jointly by the holders
of any share jointly held. The objection and demand may not be
withdrawn unless the domestic company, by an authorized officer,
consents in writing. Upon the plan of exchange becoming effective,
the holder of any shares, with respect to which the objection and
demand have been made and certificates for which have been
delivered to the domestic company or its transfer agent for notation,
or any transferee, ceases to be a shareholder of the domestic
company with respect to the shares and does not have rights with
respect to the shares except the right to receive payment for the
shares under this subsection. Every shareholder failing to make
objection and demand accompanied by certificates representing the
shares with respect to which the objection and demand have been
made or withdrawing the objection and demand as provided in this
subsection are conclusively presumed to have assented to, and to
have agreed to be bound by, the plan of exchange in accordance with
its terms. Within forty-five (45) days after the date of the meeting of
shareholders of the domestic company at which the plan of exchange
was approved by the shareholders, the domestic company, or, if the
plan of exchange specifies, the acquiring corporation, shall mail a
written offer to each holder of record of shares with respect to which
an objection and demand have been made, as provided in this
subsection, to pay for the shares a price per share considered by the
corporation to be the fair value of the shares as of the date of the
meeting. The form of written offer to be used, including the price per
share, shall first be submitted to and approved by the insurance
commissioner. If the offer is accepted in writing by the holder, the
corporation shall pay the holder, within forty-five (45) days after the
date of the plan of exchange becoming effective, the price upon the
surrender of the certificate or certificates representing the shares. If,
within thirty (30) days after the date of the mailing of the written
offer, the domestic company or the acquiring corporation, as the case
may be, and a shareholder do not agree, the corporation or the
shareholder may, within ninety (90) days after the date of the mailing
of the written offer, petition the circuit or the superior court of the
county in which the principal office of the domestic company is
located to appraise the fair value of the shares as of the date of the
meeting of shareholders of the domestic company at which the plan
of exchange was approved by the shareholders and payment of the
appraised value of the shares shall be made by the domestic company
or, if the plan of exchange so specifies, the acquiring corporation
within sixty (60) days after the entry of the judgment or order finding
the appraised value upon the surrender of the certificate or
certificates representing the shares. The practice, procedure, and
judgment in the circuit or superior court upon the petition is the
same, so far as practical, as that under IC 32-24. The judgment of the
circuit or superior court is final. All shares acquired by the domestic
company upon payment of the value of the shares shall be canceled
by the board of directors of the domestic company upon the plan of
exchange becoming effective or at any time after the plan becomes
effective and the capital stock of the domestic company shall be
decreased in accordance with IC 27-1-8-12. If the plan of exchange
does not become effective, the right of shareholders or transferees to
be paid the fair value of their shares under this subsection shall
cease, and their status shall be the same as that of shareholders who
voted in favor of the plan. If a shareholder or the shareholder's
transferee with respect to any share or shares for which objection and
demand has been made:
(1) withdraws the objection and demand in the manner provided
by this subsection;
(2) fails to submit a certificate or certificates at the time and in
the manner required by this subsection;
(3) does not file a petition for the determination of fair value
within the time and in the manner provided in this subsection
and neither the domestic company nor the acquiring corporation
files a petition for such determination; or
(4) is adjudged by a court of competent jurisdiction not to be
entitled to the relief provided by this subsection;
the right of the shareholder or the shareholder's transferee to be paid
the fair value of the share or shares under this subsection shall cease,
and the shareholder's status with respect to the share or shares is the
same as that of a shareholder who voted in favor of the plan. (Formerly: Acts 1967, c.61, s.3.) As amended by P.L.252-1985,
SEC.140; P.L.7-1987, SEC.143; P.L.2-2002, SEC.82.
IC 27-3-1-4 Filing; time plan becomes effective
Sec. 4. Not earlier than thirty-one (31) days after the date of the
meeting of shareholders of the domestic company at which the plan
of exchange was approved by such shareholders, a certificate setting
forth the plan of exchange, the manner of the approval thereof by the
directors of the acquiring corporation and the domestic company and
the manner of its adoption and the vote by which adopted by the
shareholders of the domestic company or setting forth that the plan
of exchange has been abandoned shall be signed on behalf of each
such corporation by its president or a vice-president and shall then be
presented in triplicate to the department at its office for filing. The
department shall file one (1) copy of such certificate in its offices
and shall deliver copies bearing the date and time of filing endorsed
thereon to the domestic company and the acquiring corporation.
Upon the filing of such certificate, the plan of exchange and the
issuance and exchange provided for therein shall become effective,
unless a later date and time is specified in the plan of exchange, in
which event the plan of exchange and the issuance and exchange
provided for therein shall become effective upon such later date and
time. (Formerly: Acts 1967, c.61, s.4.)
IC 27-3-1-5 Vesting of title to shares without physical transfer or deposit of
certificates; rights represented by outstanding certificates
Sec. 5. (a) Upon the plan of exchange becoming effective, the
exchange provided for therein shall be deemed to have been
consummated, each shareholder of the domestic company shall cease
to be a shareholder of such company, the ownership of all shares of
the issued and outstanding stock of the domestic company, except
shares payment of the value of which is required to be made by the
domestic company or the acquiring corporation pursuant to section
3 of this chapter, shall vest in the acquiring corporation automatically
without any physical transfer or deposit of certificates representing
such shares, and all shares payment of the value of which is required
to be made by the domestic company or the acquiring corporation
pursuant to section 3 of this chapter shall be deemed no longer
outstanding shares of the domestic company. The acquiring
corporation shall thereupon become the sole shareholder of the
domestic company and shall have all of the rights, privileges,
immunities, and powers and, except as otherwise provided in this
chapter, shall be subject to all of the duties and liabilities to the
extent provided by law of a shareholder of an insurance company
organized or reorganized under IC 27-1 or any statute enacted prior
to March 8, 1935.
(b) Certificates representing shares of the domestic company prior
to the plan of exchange becoming effective, except certificates
representing shares payment of the value of which is required to be
made pursuant to section 3 of this chapter and bearing a notation
thereon that objection and demand pursuant to such section have
been made, shall, after the plan of exchange becomes effective,
represent:
(i) shares of the issued and outstanding capital stock or other
securities issued by the acquiring corporation; and
(ii) the right, if any, to receive such cash or other consideration
upon such terms as shall be specified in the plan of exchange;
provided, that the plan of exchange may specify that all certificates
representing shares of stock of the domestic company, except
certificates representing shares payment of the value of which is
required to be made pursuant to section 3 of this chapter, shall after
the plan of exchange becomes effective represent only the right to
receive shares of stock or other securities issued by the acquiring
corporation or cash or other consideration or any combination
thereof upon such terms as shall be specified in the plan of exchange.
Certificates representing shares of the domestic company with
respect to which an objection and demand have been made pursuant
to section 3 of this chapter and bearing a notation thereon that such
objection and demand have been made, shall, after the plan of
exchange becomes effective, represent only the right to receive
payment therefor, subject to the provisions of this chapter. (Formerly: Acts 1967, c.61, s.5.) As amended by P.L.252-1985,
SEC.141.
IC 27-3-1-6 Effect of acquisition on insurance business conducted
Sec. 6. Nothing contained in this chapter shall be construed to
authorize any insurance company to engage in any kind or kinds of
insurance business not authorized by its articles of incorporation, or
to authorize any acquiring corporation which is not an insurance
company to engage directly in the business of insurance. Subsequent
to the effective date of the plan of exchange, the insurance
department, pursuant to the authority vested in it by IC 27-1-3-7 and
IC 27-1-3.1 and having regard to the findings stated in section 3(b)
of this chapter, shall have the authority to require that the affairs of
the domestic company be conducted in such manner as to assure the
continuing safe conduct and transaction of the domestic company's
business of insurance. (Formerly: Acts 1967, c.61, s.7.) As amended by P.L.252-1985,
SEC.142; P.L.26-1991, SEC.25.
IC 27-3-1-7 Continuation of domestic corporation and acquiring corporation
as separate entities
Sec. 7. The domestic company and the acquiring corporation shall
in all respects stand before the law as separate and distinct
corporations, with neither of such corporations having any liability
to the creditors, policyholders, if any, or shareholders of the other,
any acts or omissions of the officers, directors, or shareholders of
either or both of such corporations notwithstanding. (Formerly: Acts 1967, c.61, s.8.)
IC 27-3 ARTICLE 3. CONSOLIDATIONS AND
REORGANIZATION
IC 27-3-1
Chapter 1. Exchange of Securities
IC 27-3-1-1 Construction and application
Sec. 1. This chapter shall be supplemental to IC 27-1. All
provisions of IC 27-1 shall be fully and completely applicable to this
chapter in the same manner as if the provisions of this chapter had
been an original part of IC 27-1; provided, that the provisions of this
chapter shall be controlling in the event there exists any conflict
between the provisions of this chapter and the provisions of IC 27-1. (Formerly: Acts 1967, c.61, s.1.) As amended by P.L.252-1985,
SEC.138.
IC 27-3-1-2 Authority to adopt plan of exchange
Sec. 2. Any domestic stock insurance company (referred to in this
chapter as the "domestic company") may adopt a plan of exchange
providing for the exchange by its shareholders of their stock in the
domestic company for:
(i) shares of stock issued by any other stock insurance
corporation organized or reorganized under the provisions of
IC 27-1 or any statute enacted prior to March 8, 1935, or any
stock corporation organized under the provisions of IC 23-1 or
any foreign stock corporation (such other corporation is referred
to in this chapter as the "acquiring corporation");
(ii) other securities issued by the acquiring corporation;
(iii) cash;
(iv) other consideration; or
(v) any combination of such stock, such other securities, cash,
or other consideration. (Formerly: Acts 1967, c.61, s.2.) As amended by P.L.252-1985,
SEC.139.
IC 27-3-1-3 Manner of adoption of plan of exchange; approvals; compensation
of dissenting shareholders
Sec. 3. (a) Subject to section 2 of this chapter, any domestic
company may adopt a plan of exchange with any acquiring
corporation providing for the exchange of the outstanding stock of
the domestic company for shares of stock or other securities issued
by the acquiring corporation or cash or other consideration, or any
combination, in the following manner. The boards of directors of the
domestic company and of the acquiring corporation by resolutions
approved by a majority of the whole of each board shall adopt a plan
of exchange that sets forth the terms and conditions of the exchange
and the mode of carrying the terms and conditions into effect and
other provisions with respect to the exchange as may be deemed
necessary or desirable.
(b) The domestic company and the acquiring corporation shall
submit to the insurance commissioner three (3) copies of the plan of
exchange certified by an officer of each as having been adopted in
accordance with subsection (a). The copies of the plan of exchange
shall be accompanied by financial statements of the domestic
company for its last preceding fiscal year prepared pursuant to
IC 27-1-20-21, pro forma financial statements of each corporation
based on the assumption that the plan of exchange was effective as
proposed at the end of the last preceding fiscal year of the domestic
company, an estimate of expenses already incurred and of expenses
expected to be incurred in connection with the proposed plan of
exchange, and a written statement that sets forth for each corporation
the proposed changes, if any, in management policies and in the
identity of officers and directors of the domestic company and of the
acquiring corporation that are initially contemplated if the plan of
exchange is effected as proposed. The insurance commissioner shall
hold a hearing upon the fairness of the terms, conditions, and
provisions of the plan of exchange and the proposed exchange of
stock or other securities of the acquiring corporation or cash or other
consideration or any combination thereof for the stock of the
domestic company at which the policyholders and the shareholders
of both the domestic company and the acquiring corporation and any
other interested party may appear and to become party to the
proceeding. The commissioner shall require the domestic company
and the acquiring corporation to produce evidence as the
commissioner considers necessary to establish the foregoing,
including evidence concerning the valuation of the respective
companies and the method utilized by the management of each
corporation to accomplish the valuation, inclusive of the value
established with respect to the stock of the domestic company that is
proposed to be exchanged as well as the value of the stock,
securities, and consideration other than cash to be offered by the
acquiring corporation in the exchange. The hearing shall be
commenced not less than twenty (20) days after the date on which
the plan of exchange is presented to the commissioner. The hearing
shall be held in Indianapolis, Indiana, at a place, date, and time
specified by the insurance commissioner. Notice of the hearing shall
be published in a newspaper of general circulation in the city where
the principal office of the domestic company and of the acquiring
corporation are located and Indianapolis once a week for two (2)
successive weeks. Written notice of the hearing shall be mailed at
least ten (10) days before the hearing by the domestic company and
by the acquiring corporation to all of their respective shareholders.
All expenses of publication shall be borne by the domestic company
or the acquiring corporation, or both, as specified in the plan of
exchange. Except as otherwise provided in this section, the hearing
and the determination are subject to IC 4-21.5-3. The commissioner
shall issue an order approving the plan of exchange as delivered to
the commissioner by the domestic company and the acquiring
corporation and the modifications approved by a majority of the
whole board of directors of each corporation if the commissioner
finds:
(1) that the plan, including all modifications, if effected, will
not tend adversely to affect the financial stability or
management of the domestic company or the general capacity
or intention to continue the safe and prudent transaction of the
insurance business of the domestic company, or of the acquiring
corporation, if it is a domestic insurance company;
(2) that the interests of the policyholders and shareholders of
the domestic company, and, if the acquiring corporation is a
domestic insurance company, the policyholders of the acquiring
corporation are protected;
(3) that the fulfillment of the plan will not affect either the
contractual obligations of the domestic company and of the
acquiring corporation, if it is a domestic insurance company, to
its policyholders or the ability and tendency of either to render
service to its policyholders in the future; and
(4) that the terms and conditions of the plan of exchange and
the proposed issuance and exchange are fair and reasonable.
The order of the commissioner approving or disapproving the plan
of exchange shall be filed in the department within sixty (60) days
after the date the plan of exchange is presented to the commissioner.
The department shall give notice of the order in the manner
prescribed in IC 4-21.5-3 to all parties to the proceeding, and the
department shall endorse the commissioner's approval or disapproval
on the plan of exchange in the manner provided in IC 27-1-6-8 and
shall deliver copies to the domestic company and to the acquiring
corporation. Any party to the proceeding aggrieved by the order are
entitled to a judicial review of the order in accordance with
IC 4-21.5-5.
(c) The plan of exchange as approved by the insurance
commissioner shall then be submitted to a vote of the shareholders
of the domestic company at an annual or special meeting of the
shareholders. Notice of the submission of the plan to the
shareholders shall be included in the notice of the annual or special
meeting. The shareholders entitled to vote in respect of the plan may
vote in person or by proxy, and each shareholder has one (1) vote for
each share of voting stock held by the shareholder. Jointly owned
shares may only be voted jointly. The plan shall be approved by the
shareholders of the domestic company upon receiving the affirmative
votes representing two thirds (2/3) of the outstanding capital stock of
the domestic company or a larger proportion as may be specified in
the plan of exchange. Notwithstanding shareholder adoption of the
plan of exchange and at any time before the filing of the certificate
setting forth the plan of exchange by the department, pursuant to
section 4 of this chapter, the plan of exchange may be abandoned
pursuant to a provision for abandonment, if any, contained in the
plan of exchange.
(d) Within ten (10) days after the plan of exchange is adopted by
the shareholders of the domestic company, a written notice of the
adoption of the plan of exchange shall be mailed or delivered
personally to each shareholder of record of the company who was
entitled to vote on the plan. The domestic company shall file with the
department an affidavit of the secretary or an assistant secretary of
the company or of an officer of the transfer agent of the company
that the notice was given.
(e) Any shareholder of the domestic company owning shares not
voted in favor of the plan at the meeting at which the plan was
approved by the shareholders of the domestic company may object
in writing to the plan and demand payment, should the plan become
effective, of the fair value of any shares as of the day on which the
plan of exchange was approved by the shareholders of the domestic
company pursuant to subsection (c). The objection and demand must
be received, together with the certificate or certificates representing
the shares with respect to which objection and demand have been
made for notation that the objection and demand have been made, by
the domestic company or its transfer agent within thirty (30) days
after the date of the meeting of shareholders. The objection and
demand may not pertain to any shares that were voted in favor of the
plan. Objection and demand can only be made jointly by the holders
of any share jointly held. The objection and demand may not be
withdrawn unless the domestic company, by an authorized officer,
consents in writing. Upon the plan of exchange becoming effective,
the holder of any shares, with respect to which the objection and
demand have been made and certificates for which have been
delivered to the domestic company or its transfer agent for notation,
or any transferee, ceases to be a shareholder of the domestic
company with respect to the shares and does not have rights with
respect to the shares except the right to receive payment for the
shares under this subsection. Every shareholder failing to make
objection and demand accompanied by certificates representing the
shares with respect to which the objection and demand have been
made or withdrawing the objection and demand as provided in this
subsection are conclusively presumed to have assented to, and to
have agreed to be bound by, the plan of exchange in accordance with
its terms. Within forty-five (45) days after the date of the meeting of
shareholders of the domestic company at which the plan of exchange
was approved by the shareholders, the domestic company, or, if the
plan of exchange specifies, the acquiring corporation, shall mail a
written offer to each holder of record of shares with respect to which
an objection and demand have been made, as provided in this
subsection, to pay for the shares a price per share considered by the
corporation to be the fair value of the shares as of the date of the
meeting. The form of written offer to be used, including the price per
share, shall first be submitted to and approved by the insurance
commissioner. If the offer is accepted in writing by the holder, the
corporation shall pay the holder, within forty-five (45) days after the
date of the plan of exchange becoming effective, the price upon the
surrender of the certificate or certificates representing the shares. If,
within thirty (30) days after the date of the mailing of the written
offer, the domestic company or the acquiring corporation, as the case
may be, and a shareholder do not agree, the corporation or the
shareholder may, within ninety (90) days after the date of the mailing
of the written offer, petition the circuit or the superior court of the
county in which the principal office of the domestic company is
located to appraise the fair value of the shares as of the date of the
meeting of shareholders of the domestic company at which the plan
of exchange was approved by the shareholders and payment of the
appraised value of the shares shall be made by the domestic company
or, if the plan of exchange so specifies, the acquiring corporation
within sixty (60) days after the entry of the judgment or order finding
the appraised value upon the surrender of the certificate or
certificates representing the shares. The practice, procedure, and
judgment in the circuit or superior court upon the petition is the
same, so far as practical, as that under IC 32-24. The judgment of the
circuit or superior court is final. All shares acquired by the domestic
company upon payment of the value of the shares shall be canceled
by the board of directors of the domestic company upon the plan of
exchange becoming effective or at any time after the plan becomes
effective and the capital stock of the domestic company shall be
decreased in accordance with IC 27-1-8-12. If the plan of exchange
does not become effective, the right of shareholders or transferees to
be paid the fair value of their shares under this subsection shall
cease, and their status shall be the same as that of shareholders who
voted in favor of the plan. If a shareholder or the shareholder's
transferee with respect to any share or shares for which objection and
demand has been made:
(1) withdraws the objection and demand in the manner provided
by this subsection;
(2) fails to submit a certificate or certificates at the time and in
the manner required by this subsection;
(3) does not file a petition for the determination of fair value
within the time and in the manner provided in this subsection
and neither the domestic company nor the acquiring corporation
files a petition for such determination; or
(4) is adjudged by a court of competent jurisdiction not to be
entitled to the relief provided by this subsection;
the right of the shareholder or the shareholder's transferee to be paid
the fair value of the share or shares under this subsection shall cease,
and the shareholder's status with respect to the share or shares is the
same as that of a shareholder who voted in favor of the plan. (Formerly: Acts 1967, c.61, s.3.) As amended by P.L.252-1985,
SEC.140; P.L.7-1987, SEC.143; P.L.2-2002, SEC.82.
IC 27-3-1-4 Filing; time plan becomes effective
Sec. 4. Not earlier than thirty-one (31) days after the date of the
meeting of shareholders of the domestic company at which the plan
of exchange was approved by such shareholders, a certificate setting
forth the plan of exchange, the manner of the approval thereof by the
directors of the acquiring corporation and the domestic company and
the manner of its adoption and the vote by which adopted by the
shareholders of the domestic company or setting forth that the plan
of exchange has been abandoned shall be signed on behalf of each
such corporation by its president or a vice-president and shall then be
presented in triplicate to the department at its office for filing. The
department shall file one (1) copy of such certificate in its offices
and shall deliver copies bearing the date and time of filing endorsed
thereon to the domestic company and the acquiring corporation.
Upon the filing of such certificate, the plan of exchange and the
issuance and exchange provided for therein shall become effective,
unless a later date and time is specified in the plan of exchange, in
which event the plan of exchange and the issuance and exchange
provided for therein shall become effective upon such later date and
time. (Formerly: Acts 1967, c.61, s.4.)
IC 27-3-1-5 Vesting of title to shares without physical transfer or deposit of
certificates; rights represented by outstanding certificates
Sec. 5. (a) Upon the plan of exchange becoming effective, the
exchange provided for therein shall be deemed to have been
consummated, each shareholder of the domestic company shall cease
to be a shareholder of such company, the ownership of all shares of
the issued and outstanding stock of the domestic company, except
shares payment of the value of which is required to be made by the
domestic company or the acquiring corporation pursuant to section
3 of this chapter, shall vest in the acquiring corporation automatically
without any physical transfer or deposit of certificates representing
such shares, and all shares payment of the value of which is required
to be made by the domestic company or the acquiring corporation
pursuant to section 3 of this chapter shall be deemed no longer
outstanding shares of the domestic company. The acquiring
corporation shall thereupon become the sole shareholder of the
domestic company and shall have all of the rights, privileges,
immunities, and powers and, except as otherwise provided in this
chapter, shall be subject to all of the duties and liabilities to the
extent provided by law of a shareholder of an insurance company
organized or reorganized under IC 27-1 or any statute enacted prior
to March 8, 1935.
(b) Certificates representing shares of the domestic company prior
to the plan of exchange becoming effective, except certificates
representing shares payment of the value of which is required to be
made pursuant to section 3 of this chapter and bearing a notation
thereon that objection and demand pursuant to such section have
been made, shall, after the plan of exchange becomes effective,
represent:
(i) shares of the issued and outstanding capital stock or other
securities issued by the acquiring corporation; and
(ii) the right, if any, to receive such cash or other consideration
upon such terms as shall be specified in the plan of exchange;
provided, that the plan of exchange may specify that all certificates
representing shares of stock of the domestic company, except
certificates representing shares payment of the value of which is
required to be made pursuant to section 3 of this chapter, shall after
the plan of exchange becomes effective represent only the right to
receive shares of stock or other securities issued by the acquiring
corporation or cash or other consideration or any combination
thereof upon such terms as shall be specified in the plan of exchange.
Certificates representing shares of the domestic company with
respect to which an objection and demand have been made pursuant
to section 3 of this chapter and bearing a notation thereon that such
objection and demand have been made, shall, after the plan of
exchange becomes effective, represent only the right to receive
payment therefor, subject to the provisions of this chapter. (Formerly: Acts 1967, c.61, s.5.) As amended by P.L.252-1985,
SEC.141.
IC 27-3-1-6 Effect of acquisition on insurance business conducted
Sec. 6. Nothing contained in this chapter shall be construed to
authorize any insurance company to engage in any kind or kinds of
insurance business not authorized by its articles of incorporation, or
to authorize any acquiring corporation which is not an insurance
company to engage directly in the business of insurance. Subsequent
to the effective date of the plan of exchange, the insurance
department, pursuant to the authority vested in it by IC 27-1-3-7 and
IC 27-1-3.1 and having regard to the findings stated in section 3(b)
of this chapter, shall have the authority to require that the affairs of
the domestic company be conducted in such manner as to assure the
continuing safe conduct and transaction of the domestic company's
business of insurance. (Formerly: Acts 1967, c.61, s.7.) As amended by P.L.252-1985,
SEC.142; P.L.26-1991, SEC.25.
IC 27-3-1-7 Continuation of domestic corporation and acquiring corporation
as separate entities
Sec. 7. The domestic company and the acquiring corporation shall
in all respects stand before the law as separate and distinct
corporations, with neither of such corporations having any liability
to the creditors, policyholders, if any, or shareholders of the other,
any acts or omissions of the officers, directors, or shareholders of
either or both of such corporations notwithstanding. (Formerly: Acts 1967, c.61, s.8.)
IC 27-3 ARTICLE 3. CONSOLIDATIONS AND
REORGANIZATION
IC 27-3-1
Chapter 1. Exchange of Securities
IC 27-3-1-1 Construction and application
Sec. 1. This chapter shall be supplemental to IC 27-1. All
provisions of IC 27-1 shall be fully and completely applicable to this
chapter in the same manner as if the provisions of this chapter had
been an original part of IC 27-1; provided, that the provisions of this
chapter shall be controlling in the event there exists any conflict
between the provisions of this chapter and the provisions of IC 27-1. (Formerly: Acts 1967, c.61, s.1.) As amended by P.L.252-1985,
SEC.138.
IC 27-3-1-2 Authority to adopt plan of exchange
Sec. 2. Any domestic stock insurance company (referred to in this
chapter as the "domestic company") may adopt a plan of exchange
providing for the exchange by its shareholders of their stock in the
domestic company for:
(i) shares of stock issued by any other stock insurance
corporation organized or reorganized under the provisions of
IC 27-1 or any statute enacted prior to March 8, 1935, or any
stock corporation organized under the provisions of IC 23-1 or
any foreign stock corporation (such other corporation is referred
to in this chapter as the "acquiring corporation");
(ii) other securities issued by the acquiring corporation;
(iii) cash;
(iv) other consideration; or
(v) any combination of such stock, such other securities, cash,
or other consideration. (Formerly: Acts 1967, c.61, s.2.) As amended by P.L.252-1985,
SEC.139.
IC 27-3-1-3 Manner of adoption of plan of exchange; approvals; compensation
of dissenting shareholders
Sec. 3. (a) Subject to section 2 of this chapter, any domestic
company may adopt a plan of exchange with any acquiring
corporation providing for the exchange of the outstanding stock of
the domestic company for shares of stock or other securities issued
by the acquiring corporation or cash or other consideration, or any
combination, in the following manner. The boards of directors of the
domestic company and of the acquiring corporation by resolutions
approved by a majority of the whole of each board shall adopt a plan
of exchange that sets forth the terms and conditions of the exchange
and the mode of carrying the terms and conditions into effect and
other provisions with respect to the exchange as may be deemed
necessary or desirable.
(b) The domestic company and the acquiring corporation shall
submit to the insurance commissioner three (3) copies of the plan of
exchange certified by an officer of each as having been adopted in
accordance with subsection (a). The copies of the plan of exchange
shall be accompanied by financial statements of the domestic
company for its last preceding fiscal year prepared pursuant to
IC 27-1-20-21, pro forma financial statements of each corporation
based on the assumption that the plan of exchange was effective as
proposed at the end of the last preceding fiscal year of the domestic
company, an estimate of expenses already incurred and of expenses
expected to be incurred in connection with the proposed plan of
exchange, and a written statement that sets forth for each corporation
the proposed changes, if any, in management policies and in the
identity of officers and directors of the domestic company and of the
acquiring corporation that are initially contemplated if the plan of
exchange is effected as proposed. The insurance commissioner shall
hold a hearing upon the fairness of the terms, conditions, and
provisions of the plan of exchange and the proposed exchange of
stock or other securities of the acquiring corporation or cash or other
consideration or any combination thereof for the stock of the
domestic company at which the policyholders and the shareholders
of both the domestic company and the acquiring corporation and any
other interested party may appear and to become party to the
proceeding. The commissioner shall require the domestic company
and the acquiring corporation to produce evidence as the
commissioner considers necessary to establish the foregoing,
including evidence concerning the valuation of the respective
companies and the method utilized by the management of each
corporation to accomplish the valuation, inclusive of the value
established with respect to the stock of the domestic company that is
proposed to be exchanged as well as the value of the stock,
securities, and consideration other than cash to be offered by the
acquiring corporation in the exchange. The hearing shall be
commenced not less than twenty (20) days after the date on which
the plan of exchange is presented to the commissioner. The hearing
shall be held in Indianapolis, Indiana, at a place, date, and time
specified by the insurance commissioner. Notice of the hearing shall
be published in a newspaper of general circulation in the city where
the principal office of the domestic company and of the acquiring
corporation are located and Indianapolis once a week for two (2)
successive weeks. Written notice of the hearing shall be mailed at
least ten (10) days before the hearing by the domestic company and
by the acquiring corporation to all of their respective shareholders.
All expenses of publication shall be borne by the domestic company
or the acquiring corporation, or both, as specified in the plan of
exchange. Except as otherwise provided in this section, the hearing
and the determination are subject to IC 4-21.5-3. The commissioner
shall issue an order approving the plan of exchange as delivered to
the commissioner by the domestic company and the acquiring
corporation and the modifications approved by a majority of the
whole board of directors of each corporation if the commissioner
finds:
(1) that the plan, including all modifications, if effected, will
not tend adversely to affect the financial stability or
management of the domestic company or the general capacity
or intention to continue the safe and prudent transaction of the
insurance business of the domestic company, or of the acquiring
corporation, if it is a domestic insurance company;
(2) that the interests of the policyholders and shareholders of
the domestic company, and, if the acquiring corporation is a
domestic insurance company, the policyholders of the acquiring
corporation are protected;
(3) that the fulfillment of the plan will not affect either the
contractual obligations of the domestic company and of the
acquiring corporation, if it is a domestic insurance company, to
its policyholders or the ability and tendency of either to render
service to its policyholders in the future; and
(4) that the terms and conditions of the plan of exchange and
the proposed issuance and exchange are fair and reasonable.
The order of the commissioner approving or disapproving the plan
of exchange shall be filed in the department within sixty (60) days
after the date the plan of exchange is presented to the commissioner.
The department shall give notice of the order in the manner
prescribed in IC 4-21.5-3 to all parties to the proceeding, and the
department shall endorse the commissioner's approval or disapproval
on the plan of exchange in the manner provided in IC 27-1-6-8 and
shall deliver copies to the domestic company and to the acquiring
corporation. Any party to the proceeding aggrieved by the order are
entitled to a judicial review of the order in accordance with
IC 4-21.5-5.
(c) The plan of exchange as approved by the insurance
commissioner shall then be submitted to a vote of the shareholders
of the domestic company at an annual or special meeting of the
shareholders. Notice of the submission of the plan to the
shareholders shall be included in the notice of the annual or special
meeting. The shareholders entitled to vote in respect of the plan may
vote in person or by proxy, and each shareholder has one (1) vote for
each share of voting stock held by the shareholder. Jointly owned
shares may only be voted jointly. The plan shall be approved by the
shareholders of the domestic company upon receiving the affirmative
votes representing two thirds (2/3) of the outstanding capital stock of
the domestic company or a larger proportion as may be specified in
the plan of exchange. Notwithstanding shareholder adoption of the
plan of exchange and at any time before the filing of the certificate
setting forth the plan of exchange by the department, pursuant to
section 4 of this chapter, the plan of exchange may be abandoned
pursuant to a provision for abandonment, if any, contained in the
plan of exchange.
(d) Within ten (10) days after the plan of exchange is adopted by
the shareholders of the domestic company, a written notice of the
adoption of the plan of exchange shall be mailed or delivered
personally to each shareholder of record of the company who was
entitled to vote on the plan. The domestic company shall file with the
department an affidavit of the secretary or an assistant secretary of
the company or of an officer of the transfer agent of the company
that the notice was given.
(e) Any shareholder of the domestic company owning shares not
voted in favor of the plan at the meeting at which the plan was
approved by the shareholders of the domestic company may object
in writing to the plan and demand payment, should the plan become
effective, of the fair value of any shares as of the day on which the
plan of exchange was approved by the shareholders of the domestic
company pursuant to subsection (c). The objection and demand must
be received, together with the certificate or certificates representing
the shares with respect to which objection and demand have been
made for notation that the objection and demand have been made, by
the domestic company or its transfer agent within thirty (30) days
after the date of the meeting of shareholders. The objection and
demand may not pertain to any shares that were voted in favor of the
plan. Objection and demand can only be made jointly by the holders
of any share jointly held. The objection and demand may not be
withdrawn unless the domestic company, by an authorized officer,
consents in writing. Upon the plan of exchange becoming effective,
the holder of any shares, with respect to which the objection and
demand have been made and certificates for which have been
delivered to the domestic company or its transfer agent for notation,
or any transferee, ceases to be a shareholder of the domestic
company with respect to the shares and does not have rights with
respect to the shares except the right to receive payment for the
shares under this subsection. Every shareholder failing to make
objection and demand accompanied by certificates representing the
shares with respect to which the objection and demand have been
made or withdrawing the objection and demand as provided in this
subsection are conclusively presumed to have assented to, and to
have agreed to be bound by, the plan of exchange in accordance with
its terms. Within forty-five (45) days after the date of the meeting of
shareholders of the domestic company at which the plan of exchange
was approved by the shareholders, the domestic company, or, if the
plan of exchange specifies, the acquiring corporation, shall mail a
written offer to each holder of record of shares with respect to which
an objection and demand have been made, as provided in this
subsection, to pay for the shares a price per share considered by the
corporation to be the fair value of the shares as of the date of the
meeting. The form of written offer to be used, including the price per
share, shall first be submitted to and approved by the insurance
commissioner. If the offer is accepted in writing by the holder, the
corporation shall pay the holder, within forty-five (45) days after the
date of the plan of exchange becoming effective, the price upon the
surrender of the certificate or certificates representing the shares. If,
within thirty (30) days after the date of the mailing of the written
offer, the domestic company or the acquiring corporation, as the case
may be, and a shareholder do not agree, the corporation or the
shareholder may, within ninety (90) days after the date of the mailing
of the written offer, petition the circuit or the superior court of the
county in which the principal office of the domestic company is
located to appraise the fair value of the shares as of the date of the
meeting of shareholders of the domestic company at which the plan
of exchange was approved by the shareholders and payment of the
appraised value of the shares shall be made by the domestic company
or, if the plan of exchange so specifies, the acquiring corporation
within sixty (60) days after the entry of the judgment or order finding
the appraised value upon the surrender of the certificate or
certificates representing the shares. The practice, procedure, and
judgment in the circuit or superior court upon the petition is the
same, so far as practical, as that under IC 32-24. The judgment of the
circuit or superior court is final. All shares acquired by the domestic
company upon payment of the value of the shares shall be canceled
by the board of directors of the domestic company upon the plan of
exchange becoming effective or at any time after the plan becomes
effective and the capital stock of the domestic company shall be
decreased in accordance with IC 27-1-8-12. If the plan of exchange
does not become effective, the right of shareholders or transferees to
be paid the fair value of their shares under this subsection shall
cease, and their status shall be the same as that of shareholders who
voted in favor of the plan. If a shareholder or the shareholder's
transferee with respect to any share or shares for which objection and
demand has been made:
(1) withdraws the objection and demand in the manner provided
by this subsection;
(2) fails to submit a certificate or certificates at the time and in
the manner required by this subsection;
(3) does not file a petition for the determination of fair value
within the time and in the manner provided in this subsection
and neither the domestic company nor the acquiring corporation
files a petition for such determination; or
(4) is adjudged by a court of competent jurisdiction not to be
entitled to the relief provided by this subsection;
the right of the shareholder or the shareholder's transferee to be paid
the fair value of the share or shares under this subsection shall cease,
and the shareholder's status with respect to the share or shares is the
same as that of a shareholder who voted in favor of the plan. (Formerly: Acts 1967, c.61, s.3.) As amended by P.L.252-1985,
SEC.140; P.L.7-1987, SEC.143; P.L.2-2002, SEC.82.
IC 27-3-1-4 Filing; time plan becomes effective
Sec. 4. Not earlier than thirty-one (31) days after the date of the
meeting of shareholders of the domestic company at which the plan
of exchange was approved by such shareholders, a certificate setting
forth the plan of exchange, the manner of the approval thereof by the
directors of the acquiring corporation and the domestic company and
the manner of its adoption and the vote by which adopted by the
shareholders of the domestic company or setting forth that the plan
of exchange has been abandoned shall be signed on behalf of each
such corporation by its president or a vice-president and shall then be
presented in triplicate to the department at its office for filing. The
department shall file one (1) copy of such certificate in its offices
and shall deliver copies bearing the date and time of filing endorsed
thereon to the domestic company and the acquiring corporation.
Upon the filing of such certificate, the plan of exchange and the
issuance and exchange provided for therein shall become effective,
unless a later date and time is specified in the plan of exchange, in
which event the plan of exchange and the issuance and exchange
provided for therein shall become effective upon such later date and
time. (Formerly: Acts 1967, c.61, s.4.)
IC 27-3-1-5 Vesting of title to shares without physical transfer or deposit of
certificates; rights represented by outstanding certificates
Sec. 5. (a) Upon the plan of exchange becoming effective, the
exchange provided for therein shall be deemed to have been
consummated, each shareholder of the domestic company shall cease
to be a shareholder of such company, the ownership of all shares of
the issued and outstanding stock of the domestic company, except
shares payment of the value of which is required to be made by the
domestic company or the acquiring corporation pursuant to section
3 of this chapter, shall vest in the acquiring corporation automatically
without any physical transfer or deposit of certificates representing
such shares, and all shares payment of the value of which is required
to be made by the domestic company or the acquiring corporation
pursuant to section 3 of this chapter shall be deemed no longer
outstanding shares of the domestic company. The acquiring
corporation shall thereupon become the sole shareholder of the
domestic company and shall have all of the rights, privileges,
immunities, and powers and, except as otherwise provided in this
chapter, shall be subject to all of the duties and liabilities to the
extent provided by law of a shareholder of an insurance company
organized or reorganized under IC 27-1 or any statute enacted prior
to March 8, 1935.
(b) Certificates representing shares of the domestic company prior
to the plan of exchange becoming effective, except certificates
representing shares payment of the value of which is required to be
made pursuant to section 3 of this chapter and bearing a notation
thereon that objection and demand pursuant to such section have
been made, shall, after the plan of exchange becomes effective,
represent:
(i) shares of the issued and outstanding capital stock or other
securities issued by the acquiring corporation; and
(ii) the right, if any, to receive such cash or other consideration
upon such terms as shall be specified in the plan of exchange;
provided, that the plan of exchange may specify that all certificates
representing shares of stock of the domestic company, except
certificates representing shares payment of the value of which is
required to be made pursuant to section 3 of this chapter, shall after
the plan of exchange becomes effective represent only the right to
receive shares of stock or other securities issued by the acquiring
corporation or cash or other consideration or any combination
thereof upon such terms as shall be specified in the plan of exchange.
Certificates representing shares of the domestic company with
respect to which an objection and demand have been made pursuant
to section 3 of this chapter and bearing a notation thereon that such
objection and demand have been made, shall, after the plan of
exchange becomes effective, represent only the right to receive
payment therefor, subject to the provisions of this chapter. (Formerly: Acts 1967, c.61, s.5.) As amended by P.L.252-1985,
SEC.141.
IC 27-3-1-6 Effect of acquisition on insurance business conducted
Sec. 6. Nothing contained in this chapter shall be construed to
authorize any insurance company to engage in any kind or kinds of
insurance business not authorized by its articles of incorporation, or
to authorize any acquiring corporation which is not an insurance
company to engage directly in the business of insurance. Subsequent
to the effective date of the plan of exchange, the insurance
department, pursuant to the authority vested in it by IC 27-1-3-7 and
IC 27-1-3.1 and having regard to the findings stated in section 3(b)
of this chapter, shall have the authority to require that the affairs of
the domestic company be conducted in such manner as to assure the
continuing safe conduct and transaction of the domestic company's
business of insurance. (Formerly: Acts 1967, c.61, s.7.) As amended by P.L.252-1985,
SEC.142; P.L.26-1991, SEC.25.
IC 27-3-1-7 Continuation of domestic corporation and acquiring corporation
as separate entities
Sec. 7. The domestic company and the acquiring corporation shall
in all respects stand before the law as separate and distinct
corporations, with neither of such corporations having any liability
to the creditors, policyholders, if any, or shareholders of the other,
any acts or omissions of the officers, directors, or shareholders of
either or both of such corporations notwithstanding. (Formerly: Acts 1967, c.61, s.8.)
