§ 38.2-4229.1. Conversion to domestic mutual insurer.
A. Any domestic nonstock corporation subject to the provisions of thischapter that has the surplus required by § 38.2-1030 for domestic mutualinsurers issuing policies without contingent liability may, at its option andwithout reincorporation, convert to a domestic mutual insurer by followingthe procedure set forth in this section.
B. Any nonstock corporation eligible to convert to a domestic mutual insurerunder subsection A of this section may effect such conversion by amending itsarticles of incorporation to delete any reference to this chapter and tocomply with the provisions of § 38.2-1002 relating to the articles ofincorporation of a domestic mutual insurer. Upon the issuance of acertificate of amendment by the Commission, the conversion shall beeffective, such nonstock corporation shall become subject to all of theprovisions of this title relating to domestic mutual insurers, and, except asprovided in subsection D of this section, such nonstock corporation shall nolonger be subject to the provisions of this chapter.
C. If any nonstock corporation converts from a health services plan organizedunder this chapter to a domestic mutual insurer, then at least ninety daysprior to the effective date of conversion, the nonstock corporation shallcomply with § 38.2-316 by filing with the Commission copies of all policiesof insurance that it proposes to issue after the effective date ofconversion. All subscription contracts issued and outstanding as of theeffective date of conversion shall remain in force in accordance with theirterms until the expiration or termination of such contracts.
D. Any nonstock corporation that offers an open enrollment program under §38.2-4216.1 shall, directly or through a subsidiary, continue to offer suchprogram notwithstanding its conversion to a domestic mutual insurer. If anysuch domestic mutual insurer converts to a stock insurer, it shall, directlyor through a subsidiary, continue to offer such program notwithstanding itsconversion to a stock insurer. No such insurer shall discontinue the openenrollment program required by § 38.2-4216.1 without first giving theCommission twenty-four months' prior written notice. For so long as theinsurer continues to offer such open enrollment program, the license taximposed on the direct gross premium income of the insurer and itssubsidiaries from accident and sickness insurance shall be two and one-fourthpercent (2.25%) on premium income from accident and sickness insurance issuedto primary small employers as defined in § 38.2-3431 and three-fourths of onepercent (.75%) on other premium income from accident and sickness insurancefor taxable year 1997; and shall thereafter be three-fourths of one percenton premium income derived from individual accident and sickness insurancepolicies and from open enrollment contracts as defined in § 38.2-4216.1, andtwo and one-fourth percent on other premium income from accident and sicknessinsurance.
E. No policy of accident and sickness insurance issued by a nonstockcorporation after its conversion to a domestic mutual insurer shall deny thepolicyholder the right to assign his benefit, except that denial may be madewhere the benefit is eighty percent of covered charges or greater.
(1991, c. 87; 1992, c. 473; 1994, c. 294; 1997, cc. 807, 913.)
§ 38.2-4229.1. Conversion to domestic mutual insurer.
A. Any domestic nonstock corporation subject to the provisions of thischapter that has the surplus required by § 38.2-1030 for domestic mutualinsurers issuing policies without contingent liability may, at its option andwithout reincorporation, convert to a domestic mutual insurer by followingthe procedure set forth in this section.
B. Any nonstock corporation eligible to convert to a domestic mutual insurerunder subsection A of this section may effect such conversion by amending itsarticles of incorporation to delete any reference to this chapter and tocomply with the provisions of § 38.2-1002 relating to the articles ofincorporation of a domestic mutual insurer. Upon the issuance of acertificate of amendment by the Commission, the conversion shall beeffective, such nonstock corporation shall become subject to all of theprovisions of this title relating to domestic mutual insurers, and, except asprovided in subsection D of this section, such nonstock corporation shall nolonger be subject to the provisions of this chapter.
C. If any nonstock corporation converts from a health services plan organizedunder this chapter to a domestic mutual insurer, then at least ninety daysprior to the effective date of conversion, the nonstock corporation shallcomply with § 38.2-316 by filing with the Commission copies of all policiesof insurance that it proposes to issue after the effective date ofconversion. All subscription contracts issued and outstanding as of theeffective date of conversion shall remain in force in accordance with theirterms until the expiration or termination of such contracts.
D. Any nonstock corporation that offers an open enrollment program under §38.2-4216.1 shall, directly or through a subsidiary, continue to offer suchprogram notwithstanding its conversion to a domestic mutual insurer. If anysuch domestic mutual insurer converts to a stock insurer, it shall, directlyor through a subsidiary, continue to offer such program notwithstanding itsconversion to a stock insurer. No such insurer shall discontinue the openenrollment program required by § 38.2-4216.1 without first giving theCommission twenty-four months' prior written notice. For so long as theinsurer continues to offer such open enrollment program, the license taximposed on the direct gross premium income of the insurer and itssubsidiaries from accident and sickness insurance shall be two and one-fourthpercent (2.25%) on premium income from accident and sickness insurance issuedto primary small employers as defined in § 38.2-3431 and three-fourths of onepercent (.75%) on other premium income from accident and sickness insurancefor taxable year 1997; and shall thereafter be three-fourths of one percenton premium income derived from individual accident and sickness insurancepolicies and from open enrollment contracts as defined in § 38.2-4216.1, andtwo and one-fourth percent on other premium income from accident and sicknessinsurance.
E. No policy of accident and sickness insurance issued by a nonstockcorporation after its conversion to a domestic mutual insurer shall deny thepolicyholder the right to assign his benefit, except that denial may be madewhere the benefit is eighty percent of covered charges or greater.
(1991, c. 87; 1992, c. 473; 1994, c. 294; 1997, cc. 807, 913.)
§ 38.2-4229.1. Conversion to domestic mutual insurer.
A. Any domestic nonstock corporation subject to the provisions of thischapter that has the surplus required by § 38.2-1030 for domestic mutualinsurers issuing policies without contingent liability may, at its option andwithout reincorporation, convert to a domestic mutual insurer by followingthe procedure set forth in this section.
B. Any nonstock corporation eligible to convert to a domestic mutual insurerunder subsection A of this section may effect such conversion by amending itsarticles of incorporation to delete any reference to this chapter and tocomply with the provisions of § 38.2-1002 relating to the articles ofincorporation of a domestic mutual insurer. Upon the issuance of acertificate of amendment by the Commission, the conversion shall beeffective, such nonstock corporation shall become subject to all of theprovisions of this title relating to domestic mutual insurers, and, except asprovided in subsection D of this section, such nonstock corporation shall nolonger be subject to the provisions of this chapter.
C. If any nonstock corporation converts from a health services plan organizedunder this chapter to a domestic mutual insurer, then at least ninety daysprior to the effective date of conversion, the nonstock corporation shallcomply with § 38.2-316 by filing with the Commission copies of all policiesof insurance that it proposes to issue after the effective date ofconversion. All subscription contracts issued and outstanding as of theeffective date of conversion shall remain in force in accordance with theirterms until the expiration or termination of such contracts.
D. Any nonstock corporation that offers an open enrollment program under §38.2-4216.1 shall, directly or through a subsidiary, continue to offer suchprogram notwithstanding its conversion to a domestic mutual insurer. If anysuch domestic mutual insurer converts to a stock insurer, it shall, directlyor through a subsidiary, continue to offer such program notwithstanding itsconversion to a stock insurer. No such insurer shall discontinue the openenrollment program required by § 38.2-4216.1 without first giving theCommission twenty-four months' prior written notice. For so long as theinsurer continues to offer such open enrollment program, the license taximposed on the direct gross premium income of the insurer and itssubsidiaries from accident and sickness insurance shall be two and one-fourthpercent (2.25%) on premium income from accident and sickness insurance issuedto primary small employers as defined in § 38.2-3431 and three-fourths of onepercent (.75%) on other premium income from accident and sickness insurancefor taxable year 1997; and shall thereafter be three-fourths of one percenton premium income derived from individual accident and sickness insurancepolicies and from open enrollment contracts as defined in § 38.2-4216.1, andtwo and one-fourth percent on other premium income from accident and sicknessinsurance.
E. No policy of accident and sickness insurance issued by a nonstockcorporation after its conversion to a domestic mutual insurer shall deny thepolicyholder the right to assign his benefit, except that denial may be madewhere the benefit is eighty percent of covered charges or greater.
(1991, c. 87; 1992, c. 473; 1994, c. 294; 1997, cc. 807, 913.)
