Conversion to reciprocal insurer, when, procedure.
379.1339. 1. An association captive insurance company or industrialinsured captive insurance company formed as a stock or mutual corporationmay be converted to or merged with and into a reciprocal insurer inaccordance with a plan therefor and the provisions of this section.
2. Any plan for such conversion or merger shall provide a fair andequitable plan for purchasing, retiring, or otherwise extinguishing theinterests of the stockholders and policyholders of a stock insurer, and themembers and policyholders of a mutual insurer, including a fair andequitable provision for the rights and remedies of dissenting stockholders,members, or policyholders.
3. In the case of a conversion authorized under subsection 1 of thissection:
(1) Such conversion shall be accomplished under such reasonable planand procedure as may be approved by the director; provided, however, thatthe director shall not approve any such plan of conversion unless suchplan:
(a) Satisfies the provisions of subsection 2 of this section;
(b) Provides for a hearing, of which notice is given or to be givento the captive insurance company, its directors, officers, andpolicyholders, and in the case of a stock insurer, its stockholders, and inthe case of a mutual insurer, its members, all of which persons shall beentitled to attend and appear at such hearing; provided, however, that ifnotice of a hearing is given and no director, officer, policyholder,member, or stockholder requests a hearing, the director may cancel suchhearing;
(c) Provides a fair and equitable plan for the conversion ofstockholder, member, or policyholder interests into subscriber interests inthe resulting reciprocal insurer substantially proportionate to thecorresponding interests in the stock or mutual insurer; provided, however,that this requirement shall not preclude the resulting reciprocal insurerfrom applying underwriting criteria that could affect ongoing ownershipinterests; and
(d) Is approved:
a. In the case of a stock insurer, by a majority of the sharesentitled to vote represented in person or by proxy at a duly called regularor special meeting at which a quorum is present; and
b. In the case of a mutual insurer, by a majority of the votinginterests of policyholders represented in person or by proxy at a dulycalled regular or special meeting thereof at which a quorum is present;
(2) The director shall approve such plan of conversion if thedirector finds that the conversion will promote the general good of thestate in conformity with those standards set forth in subdivision (1) ofsubsection 4 of section 379.1310;
(3) If the director approves the plan, the director shall amend theconverting insurer's certificate of authority to reflect conversion to areciprocal insurer and issue such amended certificate of authority to thecompany's attorney-in-fact;
(4) Upon the issuance of an amended certificate of authority of areciprocal insurer by the director, the conversion shall be effective; and
(5) Upon the effectiveness of such conversion the corporate existenceof the converting insurer shall cease and the resulting reciprocal insurershall notify the secretary of state of such conversion.
4. A merger authorized under subsection 1 of this section shall beaccomplished substantially in accordance with such procedures and plan ofmerger adopted by the board of directors of the captive insurance companyand as authorized by the director; except that, solely for purposes of suchmerger:
(1) The plan of merger shall satisfy the provisions of subsection 2of this section;
(2) The subscribers' advisory committee of a reciprocal insurer shallbe equivalent to the board of directors of a stock or mutual insurancecompany;
(3) The subscribers of a reciprocal insurer shall be the equivalentof the policyholders of a mutual insurance company;
(4) If a subscribers' advisory committee does not have a president orsecretary, the officers of such committee having substantially equivalentduties shall be deemed the president or secretary of such committee;
(5) The director shall approve the articles of merger if the directorfinds that the merger will promote the general good of the state inconformity with those standards set forth in subdivision (1) of subsection4 of section 379.1310. If the director approves the articles of merger,the director shall endorse the director's approval thereon and thesurviving insurer shall present the same to the secretary of state at thesecretary of state's office;
(6) Notwithstanding section 379.1306, the director may permit theformation, without surplus, of a captive insurance company organized as areciprocal insurer into which an existing captive insurance company may bemerged for the purpose of facilitating a transaction under this section;provided, however, that there shall be no more than one authorizedinsurance company surviving such merger; and
(7) An alien insurer may be a party to a merger authorized undersubsection 1 of this section; provided that such alien insurer shall betreated as a foreign insurer and such other jurisdictions shall be theequivalent of a state.
5. To the extent such effects are not inconsistent with theprovisions of sections 379.1300 to 379.1350, a conversion or merger underthis section shall have all of the following effects:
(1) The several insurers which are parties to the agreement of mergeror consolidation shall be a single insurer which such single insurer shallhave all of the rights, privileges, immunities, and powers and shall besubject to all of the duties and liabilities of an insurer organized undersections 379.1300 to 379.1350;
(2) Such single insurer shall thereupon and thereafter possess allthe rights, privileges, immunities, powers, and franchises of a public aswell as of a private nature of each of the insurers so merged orconsolidated; and all property, real, personal, and mixed, and all debtsdue on whatever account, including subscriptions to shares of capitalstock, and all other choices in action and all and every other interest ofor belonging to or due to each of the insurers so merged or consolidatedshall be taken and deemed to be transferred to and vested in such singleinsurer without further act or deed; and the title to any real estate, orany interest therein, under the laws of this state vested in any of suchinsurers shall not revert or be in any way impaired by reason of suchmerger or consolidation; and
(3) Such single insurer shall thenceforth be responsible and liablefor all the liabilities and obligations of each of the insurers so mergedor consolidated in the same manner and to the same extent as if such singleinsurer had itself incurred the same or contracted therefor; and any claimexisting or action or proceeding pending by or against any of such insurersmay be prosecuted to judgment as if such merger or consolidation had nottaken place. Neither the rights of creditors nor any liens upon theproperty of any such insurers shall be impaired by such merger orconsolidation, but such liens shall be limited to the property upon whichthey were liens immediately prior to the time of such merger orconsolidation, unless otherwise provided in the agreement of merger orconsolidation.
Conversion to reciprocal insurer, when, procedure.
379.1339. 1. An association captive insurance company or industrialinsured captive insurance company formed as a stock or mutual corporationmay be converted to or merged with and into a reciprocal insurer inaccordance with a plan therefor and the provisions of this section.
2. Any plan for such conversion or merger shall provide a fair andequitable plan for purchasing, retiring, or otherwise extinguishing theinterests of the stockholders and policyholders of a stock insurer, and themembers and policyholders of a mutual insurer, including a fair andequitable provision for the rights and remedies of dissenting stockholders,members, or policyholders.
3. In the case of a conversion authorized under subsection 1 of thissection:
(1) Such conversion shall be accomplished under such reasonable planand procedure as may be approved by the director; provided, however, thatthe director shall not approve any such plan of conversion unless suchplan:
(a) Satisfies the provisions of subsection 2 of this section;
(b) Provides for a hearing, of which notice is given or to be givento the captive insurance company, its directors, officers, andpolicyholders, and in the case of a stock insurer, its stockholders, and inthe case of a mutual insurer, its members, all of which persons shall beentitled to attend and appear at such hearing; provided, however, that ifnotice of a hearing is given and no director, officer, policyholder,member, or stockholder requests a hearing, the director may cancel suchhearing;
(c) Provides a fair and equitable plan for the conversion ofstockholder, member, or policyholder interests into subscriber interests inthe resulting reciprocal insurer substantially proportionate to thecorresponding interests in the stock or mutual insurer; provided, however,that this requirement shall not preclude the resulting reciprocal insurerfrom applying underwriting criteria that could affect ongoing ownershipinterests; and
(d) Is approved:
a. In the case of a stock insurer, by a majority of the sharesentitled to vote represented in person or by proxy at a duly called regularor special meeting at which a quorum is present; and
b. In the case of a mutual insurer, by a majority of the votinginterests of policyholders represented in person or by proxy at a dulycalled regular or special meeting thereof at which a quorum is present;
(2) The director shall approve such plan of conversion if thedirector finds that the conversion will promote the general good of thestate in conformity with those standards set forth in subdivision (1) ofsubsection 4 of section 379.1310;
(3) If the director approves the plan, the director shall amend theconverting insurer's certificate of authority to reflect conversion to areciprocal insurer and issue such amended certificate of authority to thecompany's attorney-in-fact;
(4) Upon the issuance of an amended certificate of authority of areciprocal insurer by the director, the conversion shall be effective; and
(5) Upon the effectiveness of such conversion the corporate existenceof the converting insurer shall cease and the resulting reciprocal insurershall notify the secretary of state of such conversion.
4. A merger authorized under subsection 1 of this section shall beaccomplished substantially in accordance with such procedures and plan ofmerger adopted by the board of directors of the captive insurance companyand as authorized by the director; except that, solely for purposes of suchmerger:
(1) The plan of merger shall satisfy the provisions of subsection 2of this section;
(2) The subscribers' advisory committee of a reciprocal insurer shallbe equivalent to the board of directors of a stock or mutual insurancecompany;
(3) The subscribers of a reciprocal insurer shall be the equivalentof the policyholders of a mutual insurance company;
(4) If a subscribers' advisory committee does not have a president orsecretary, the officers of such committee having substantially equivalentduties shall be deemed the president or secretary of such committee;
(5) The director shall approve the articles of merger if the directorfinds that the merger will promote the general good of the state inconformity with those standards set forth in subdivision (1) of subsection4 of section 379.1310. If the director approves the articles of merger,the director shall endorse the director's approval thereon and thesurviving insurer shall present the same to the secretary of state at thesecretary of state's office;
(6) Notwithstanding section 379.1306, the director may permit theformation, without surplus, of a captive insurance company organized as areciprocal insurer into which an existing captive insurance company may bemerged for the purpose of facilitating a transaction under this section;provided, however, that there shall be no more than one authorizedinsurance company surviving such merger; and
(7) An alien insurer may be a party to a merger authorized undersubsection 1 of this section; provided that such alien insurer shall betreated as a foreign insurer and such other jurisdictions shall be theequivalent of a state.
5. To the extent such effects are not inconsistent with theprovisions of sections 379.1300 to 379.1350, a conversion or merger underthis section shall have all of the following effects:
(1) The several insurers which are parties to the agreement of mergeror consolidation shall be a single insurer which such single insurer shallhave all of the rights, privileges, immunities, and powers and shall besubject to all of the duties and liabilities of an insurer organized undersections 379.1300 to 379.1350;
(2) Such single insurer shall thereupon and thereafter possess allthe rights, privileges, immunities, powers, and franchises of a public aswell as of a private nature of each of the insurers so merged orconsolidated; and all property, real, personal, and mixed, and all debtsdue on whatever account, including subscriptions to shares of capitalstock, and all other choices in action and all and every other interest ofor belonging to or due to each of the insurers so merged or consolidatedshall be taken and deemed to be transferred to and vested in such singleinsurer without further act or deed; and the title to any real estate, orany interest therein, under the laws of this state vested in any of suchinsurers shall not revert or be in any way impaired by reason of suchmerger or consolidation; and
(3) Such single insurer shall thenceforth be responsible and liablefor all the liabilities and obligations of each of the insurers so mergedor consolidated in the same manner and to the same extent as if such singleinsurer had itself incurred the same or contracted therefor; and any claimexisting or action or proceeding pending by or against any of such insurersmay be prosecuted to judgment as if such merger or consolidation had nottaken place. Neither the rights of creditors nor any liens upon theproperty of any such insurers shall be impaired by such merger orconsolidation, but such liens shall be limited to the property upon whichthey were liens immediately prior to the time of such merger orconsolidation, unless otherwise provided in the agreement of merger orconsolidation.
Conversion to reciprocal insurer, when, procedure.
379.1339. 1. An association captive insurance company or industrialinsured captive insurance company formed as a stock or mutual corporationmay be converted to or merged with and into a reciprocal insurer inaccordance with a plan therefor and the provisions of this section.
2. Any plan for such conversion or merger shall provide a fair andequitable plan for purchasing, retiring, or otherwise extinguishing theinterests of the stockholders and policyholders of a stock insurer, and themembers and policyholders of a mutual insurer, including a fair andequitable provision for the rights and remedies of dissenting stockholders,members, or policyholders.
3. In the case of a conversion authorized under subsection 1 of thissection:
(1) Such conversion shall be accomplished under such reasonable planand procedure as may be approved by the director; provided, however, thatthe director shall not approve any such plan of conversion unless suchplan:
(a) Satisfies the provisions of subsection 2 of this section;
(b) Provides for a hearing, of which notice is given or to be givento the captive insurance company, its directors, officers, andpolicyholders, and in the case of a stock insurer, its stockholders, and inthe case of a mutual insurer, its members, all of which persons shall beentitled to attend and appear at such hearing; provided, however, that ifnotice of a hearing is given and no director, officer, policyholder,member, or stockholder requests a hearing, the director may cancel suchhearing;
(c) Provides a fair and equitable plan for the conversion ofstockholder, member, or policyholder interests into subscriber interests inthe resulting reciprocal insurer substantially proportionate to thecorresponding interests in the stock or mutual insurer; provided, however,that this requirement shall not preclude the resulting reciprocal insurerfrom applying underwriting criteria that could affect ongoing ownershipinterests; and
(d) Is approved:
a. In the case of a stock insurer, by a majority of the sharesentitled to vote represented in person or by proxy at a duly called regularor special meeting at which a quorum is present; and
b. In the case of a mutual insurer, by a majority of the votinginterests of policyholders represented in person or by proxy at a dulycalled regular or special meeting thereof at which a quorum is present;
(2) The director shall approve such plan of conversion if thedirector finds that the conversion will promote the general good of thestate in conformity with those standards set forth in subdivision (1) ofsubsection 4 of section 379.1310;
(3) If the director approves the plan, the director shall amend theconverting insurer's certificate of authority to reflect conversion to areciprocal insurer and issue such amended certificate of authority to thecompany's attorney-in-fact;
(4) Upon the issuance of an amended certificate of authority of areciprocal insurer by the director, the conversion shall be effective; and
(5) Upon the effectiveness of such conversion the corporate existenceof the converting insurer shall cease and the resulting reciprocal insurershall notify the secretary of state of such conversion.
4. A merger authorized under subsection 1 of this section shall beaccomplished substantially in accordance with such procedures and plan ofmerger adopted by the board of directors of the captive insurance companyand as authorized by the director; except that, solely for purposes of suchmerger:
(1) The plan of merger shall satisfy the provisions of subsection 2of this section;
(2) The subscribers' advisory committee of a reciprocal insurer shallbe equivalent to the board of directors of a stock or mutual insurancecompany;
(3) The subscribers of a reciprocal insurer shall be the equivalentof the policyholders of a mutual insurance company;
(4) If a subscribers' advisory committee does not have a president orsecretary, the officers of such committee having substantially equivalentduties shall be deemed the president or secretary of such committee;
(5) The director shall approve the articles of merger if the directorfinds that the merger will promote the general good of the state inconformity with those standards set forth in subdivision (1) of subsection4 of section 379.1310. If the director approves the articles of merger,the director shall endorse the director's approval thereon and thesurviving insurer shall present the same to the secretary of state at thesecretary of state's office;
(6) Notwithstanding section 379.1306, the director may permit theformation, without surplus, of a captive insurance company organized as areciprocal insurer into which an existing captive insurance company may bemerged for the purpose of facilitating a transaction under this section;provided, however, that there shall be no more than one authorizedinsurance company surviving such merger; and
(7) An alien insurer may be a party to a merger authorized undersubsection 1 of this section; provided that such alien insurer shall betreated as a foreign insurer and such other jurisdictions shall be theequivalent of a state.
5. To the extent such effects are not inconsistent with theprovisions of sections 379.1300 to 379.1350, a conversion or merger underthis section shall have all of the following effects:
(1) The several insurers which are parties to the agreement of mergeror consolidation shall be a single insurer which such single insurer shallhave all of the rights, privileges, immunities, and powers and shall besubject to all of the duties and liabilities of an insurer organized undersections 379.1300 to 379.1350;
(2) Such single insurer shall thereupon and thereafter possess allthe rights, privileges, immunities, powers, and franchises of a public aswell as of a private nature of each of the insurers so merged orconsolidated; and all property, real, personal, and mixed, and all debtsdue on whatever account, including subscriptions to shares of capitalstock, and all other choices in action and all and every other interest ofor belonging to or due to each of the insurers so merged or consolidatedshall be taken and deemed to be transferred to and vested in such singleinsurer without further act or deed; and the title to any real estate, orany interest therein, under the laws of this state vested in any of suchinsurers shall not revert or be in any way impaired by reason of suchmerger or consolidation; and
(3) Such single insurer shall thenceforth be responsible and liablefor all the liabilities and obligations of each of the insurers so mergedor consolidated in the same manner and to the same extent as if such singleinsurer had itself incurred the same or contracted therefor; and any claimexisting or action or proceeding pending by or against any of such insurersmay be prosecuted to judgment as if such merger or consolidation had nottaken place. Neither the rights of creditors nor any liens upon theproperty of any such insurers shall be impaired by such merger orconsolidation, but such liens shall be limited to the property upon whichthey were liens immediately prior to the time of such merger orconsolidation, unless otherwise provided in the agreement of merger orconsolidation.
