§ 58‑8‑20. Mutualcompanies with a guaranty capital.
(a) A mutual insurancecompany formed as provided in Articles 1 through 64 of this Chapter, in lieu ofthe contributed surplus required for the organization of mutual companies underthe provisions of G.S. 58‑7‑75, or a mutual insurance company nowexisting, may, with the prior approval of the Commissioner, tender a guarantycapital offering of not less than fifty thousand dollars ($50,000), dividedinto units of one hundred dollars ($100.00) each, which shall be invested inthe same manner as is provided in this Chapter for the investment of thecapital stock of insurance companies.
(a1) Guaranty capital maybe issued by an existing domestic mutual insurance company only under thefollowing terms and conditions:
(1) To aid and assist afinancially troubled domestic mutual insurance company which otherwise facesrehabilitation or liquidation by this Department; or
(2) For any other reasonas presented in a petition to the Commissioner and which is found by theCommissioner to be reasonable, justifiable, and in the best interest of all thepolicyholders of the company.
Guaranty capital issued undersubdivision (2) of this subsection shall require written notification of theaction proposed by the board of directors of the company to be mailed to thepolicyholders of the company not less than 30 days before the meeting when theaction may be taken. The written notification shall be advertised in twonewspapers of general circulation, approved by the Commissioner, not less thanthree times a week for a period of not less than four weeks before the meeting.The written notification to policyholders shall include a proxy statement toallow policyholders to vote on the proposed action without personal attendance atthe meeting, and the Commissioner shall approve both the written notificationand the proxy statement. The proposed action shall be effected by a vote of two‑thirdsof the policyholders voting thereon in person or by proxy.
(b) The board ofdirectors of a company may distribute interest to the holders of guarantycapital in accordance with the guaranty capital filing approved by theDepartment.
(c) Guaranty capitalshall be applied to the payment of losses only when the company has exhaustedits cash in hand and the invested assets, exclusive of uncollected premiums,and when thus impaired, the directors may make good the whole or any part of itby assessments upon the contingent funds of the company at the date of suchimpairment.
(d) Guaranty capitalholders are entitled to one vote per unit of guaranty capital. Guaranty capitalholders who are not policyholders are not entitled to participate in thepolicyholder votes prescribed under subdivision (a1)(2) and subsection (e) ofthis section.
(e) Guaranty capitalmay be reduced or retired by vote of the policyholders of the company and theassent of the Commissioner, if the net assets of the company above its reserveand all other claims and obligations, exclusive of guaranty capital, for twoyears immediately preceding and including the date of its last annualstatement, is not less than twenty‑five percent (25%) of the guarantycapital. Written notice of the proposed action on the part of the company mustbe mailed to each policyholder of the company not less than 30 days before themeeting when the action may be taken, and must also be advertised in two papersof general circulation, approved by the Commissioner, not less than three timesa week for a period of not less than four weeks before the meeting. The writtennotification to policyholders shall include a proxy statement to allowpolicyholders to vote on the proposed action without personal attendance at themeeting, and the Commissioner shall approve both the written notification andthe proxy statement. An affirmative vote of at least two‑thirds of thepolicyholders voting in person or by proxy is required to adopt the proposedaction.
(f) No insurancecompany with guaranty capital shall distribute to its holders of guarantycapital its assets, except as provided in the guaranty capital filing asapproved by the Commissioner.
(g) In the event of amerger, demutualization, or other event where the entity ceases to exist,guaranty capital shall only be returned or repaid to the holders of guarantycapital to the extent that the guaranty capital has been contributed togetherwith accrued interest as specified in the filing approved by the Commissioner. (1899, c. 54, s. 34; Rev., s.4740; 1911, c. 196, s. 3; C.S., s. 6350; 1945, c. 386; 1971, c. 752; 1981, c.723; 1989, c. 320; 1991, c. 720, s. 10; 1993, c. 452, s. 17; 2003‑212, s.15; 2005‑215, s. 26.)
§ 58‑8‑20. Mutualcompanies with a guaranty capital.
(a) A mutual insurancecompany formed as provided in Articles 1 through 64 of this Chapter, in lieu ofthe contributed surplus required for the organization of mutual companies underthe provisions of G.S. 58‑7‑75, or a mutual insurance company nowexisting, may, with the prior approval of the Commissioner, tender a guarantycapital offering of not less than fifty thousand dollars ($50,000), dividedinto units of one hundred dollars ($100.00) each, which shall be invested inthe same manner as is provided in this Chapter for the investment of thecapital stock of insurance companies.
(a1) Guaranty capital maybe issued by an existing domestic mutual insurance company only under thefollowing terms and conditions:
(1) To aid and assist afinancially troubled domestic mutual insurance company which otherwise facesrehabilitation or liquidation by this Department; or
(2) For any other reasonas presented in a petition to the Commissioner and which is found by theCommissioner to be reasonable, justifiable, and in the best interest of all thepolicyholders of the company.
Guaranty capital issued undersubdivision (2) of this subsection shall require written notification of theaction proposed by the board of directors of the company to be mailed to thepolicyholders of the company not less than 30 days before the meeting when theaction may be taken. The written notification shall be advertised in twonewspapers of general circulation, approved by the Commissioner, not less thanthree times a week for a period of not less than four weeks before the meeting.The written notification to policyholders shall include a proxy statement toallow policyholders to vote on the proposed action without personal attendance atthe meeting, and the Commissioner shall approve both the written notificationand the proxy statement. The proposed action shall be effected by a vote of two‑thirdsof the policyholders voting thereon in person or by proxy.
(b) The board ofdirectors of a company may distribute interest to the holders of guarantycapital in accordance with the guaranty capital filing approved by theDepartment.
(c) Guaranty capitalshall be applied to the payment of losses only when the company has exhaustedits cash in hand and the invested assets, exclusive of uncollected premiums,and when thus impaired, the directors may make good the whole or any part of itby assessments upon the contingent funds of the company at the date of suchimpairment.
(d) Guaranty capitalholders are entitled to one vote per unit of guaranty capital. Guaranty capitalholders who are not policyholders are not entitled to participate in thepolicyholder votes prescribed under subdivision (a1)(2) and subsection (e) ofthis section.
(e) Guaranty capitalmay be reduced or retired by vote of the policyholders of the company and theassent of the Commissioner, if the net assets of the company above its reserveand all other claims and obligations, exclusive of guaranty capital, for twoyears immediately preceding and including the date of its last annualstatement, is not less than twenty‑five percent (25%) of the guarantycapital. Written notice of the proposed action on the part of the company mustbe mailed to each policyholder of the company not less than 30 days before themeeting when the action may be taken, and must also be advertised in two papersof general circulation, approved by the Commissioner, not less than three timesa week for a period of not less than four weeks before the meeting. The writtennotification to policyholders shall include a proxy statement to allowpolicyholders to vote on the proposed action without personal attendance at themeeting, and the Commissioner shall approve both the written notification andthe proxy statement. An affirmative vote of at least two‑thirds of thepolicyholders voting in person or by proxy is required to adopt the proposedaction.
(f) No insurancecompany with guaranty capital shall distribute to its holders of guarantycapital its assets, except as provided in the guaranty capital filing asapproved by the Commissioner.
(g) In the event of amerger, demutualization, or other event where the entity ceases to exist,guaranty capital shall only be returned or repaid to the holders of guarantycapital to the extent that the guaranty capital has been contributed togetherwith accrued interest as specified in the filing approved by the Commissioner. (1899, c. 54, s. 34; Rev., s.4740; 1911, c. 196, s. 3; C.S., s. 6350; 1945, c. 386; 1971, c. 752; 1981, c.723; 1989, c. 320; 1991, c. 720, s. 10; 1993, c. 452, s. 17; 2003‑212, s.15; 2005‑215, s. 26.)
§ 58‑8‑20. Mutualcompanies with a guaranty capital.
(a) A mutual insurancecompany formed as provided in Articles 1 through 64 of this Chapter, in lieu ofthe contributed surplus required for the organization of mutual companies underthe provisions of G.S. 58‑7‑75, or a mutual insurance company nowexisting, may, with the prior approval of the Commissioner, tender a guarantycapital offering of not less than fifty thousand dollars ($50,000), dividedinto units of one hundred dollars ($100.00) each, which shall be invested inthe same manner as is provided in this Chapter for the investment of thecapital stock of insurance companies.
(a1) Guaranty capital maybe issued by an existing domestic mutual insurance company only under thefollowing terms and conditions:
(1) To aid and assist afinancially troubled domestic mutual insurance company which otherwise facesrehabilitation or liquidation by this Department; or
(2) For any other reasonas presented in a petition to the Commissioner and which is found by theCommissioner to be reasonable, justifiable, and in the best interest of all thepolicyholders of the company.
Guaranty capital issued undersubdivision (2) of this subsection shall require written notification of theaction proposed by the board of directors of the company to be mailed to thepolicyholders of the company not less than 30 days before the meeting when theaction may be taken. The written notification shall be advertised in twonewspapers of general circulation, approved by the Commissioner, not less thanthree times a week for a period of not less than four weeks before the meeting.The written notification to policyholders shall include a proxy statement toallow policyholders to vote on the proposed action without personal attendance atthe meeting, and the Commissioner shall approve both the written notificationand the proxy statement. The proposed action shall be effected by a vote of two‑thirdsof the policyholders voting thereon in person or by proxy.
(b) The board ofdirectors of a company may distribute interest to the holders of guarantycapital in accordance with the guaranty capital filing approved by theDepartment.
(c) Guaranty capitalshall be applied to the payment of losses only when the company has exhaustedits cash in hand and the invested assets, exclusive of uncollected premiums,and when thus impaired, the directors may make good the whole or any part of itby assessments upon the contingent funds of the company at the date of suchimpairment.
(d) Guaranty capitalholders are entitled to one vote per unit of guaranty capital. Guaranty capitalholders who are not policyholders are not entitled to participate in thepolicyholder votes prescribed under subdivision (a1)(2) and subsection (e) ofthis section.
(e) Guaranty capitalmay be reduced or retired by vote of the policyholders of the company and theassent of the Commissioner, if the net assets of the company above its reserveand all other claims and obligations, exclusive of guaranty capital, for twoyears immediately preceding and including the date of its last annualstatement, is not less than twenty‑five percent (25%) of the guarantycapital. Written notice of the proposed action on the part of the company mustbe mailed to each policyholder of the company not less than 30 days before themeeting when the action may be taken, and must also be advertised in two papersof general circulation, approved by the Commissioner, not less than three timesa week for a period of not less than four weeks before the meeting. The writtennotification to policyholders shall include a proxy statement to allowpolicyholders to vote on the proposed action without personal attendance at themeeting, and the Commissioner shall approve both the written notification andthe proxy statement. An affirmative vote of at least two‑thirds of thepolicyholders voting in person or by proxy is required to adopt the proposedaction.
(f) No insurancecompany with guaranty capital shall distribute to its holders of guarantycapital its assets, except as provided in the guaranty capital filing asapproved by the Commissioner.
(g) In the event of amerger, demutualization, or other event where the entity ceases to exist,guaranty capital shall only be returned or repaid to the holders of guarantycapital to the extent that the guaranty capital has been contributed togetherwith accrued interest as specified in the filing approved by the Commissioner. (1899, c. 54, s. 34; Rev., s.4740; 1911, c. 196, s. 3; C.S., s. 6350; 1945, c. 386; 1971, c. 752; 1981, c.723; 1989, c. 320; 1991, c. 720, s. 10; 1993, c. 452, s. 17; 2003‑212, s.15; 2005‑215, s. 26.)
