1. The Commissioner shall issue an order making an initial determination of approval
or disapproval of the application not later than 30 days after the public hearing.
2. The Commissioner shall not approve the application unless the Commissioner finds
(a) Plan of conversion is fair and equitable to the policyholders;
(b) Plan of conversion does not deprive the policyholders of their property rights
or due process of law;
(c) New stock insurer meets the minimum requirements for a certificate of authority
to transact the business of insurance in this state; and
(d) Continued operation of the new stock insurer is not hazardous to future policyholders
and the public.
3. For the purposes of this section, the Commissioner may consider any relevant factor,
including, without limitation:
(a) The capital requirements of the new stock insurer;
(b) Whether a sufficient portion of the surplus of the converting mutual was contributed
by persons or entities whose policies or contracts were not in force on the date on
which the plan of conversion was initially approved by the board of directors of the
converting mutual to require the reduction of the consideration to policyholders to
an amount equal to less than the surplus;
(c) Whether the plan of conversion includes preemptive rights for policyholders to
purchase securities offered in the initial sale of securities by the new stock insurer;
(d) Whether the plan of conversion includes establishment of a preference account
from which the payment of any shareholder dividends, including a regular, special
or liquidation dividend, would be prohibited for such a reasonable period as the Commissioner
(e) The suitability of the trustees of any trust created to effect the conversion;
(f) Whether the utilization of a trust, if included in the plan of conversion, has
a material adverse effect on policyholders, other than delaying the receipt of shares
of capital stock.
4. If the Commissioner makes a determination to disapprove the application, the Commissioner
shall issue a final order setting forth specific findings for the disapproval.
FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature or via Westlaw before relying on it for your legal needs.
Was this helpful?
Response sent, thank you
Welcome to FindLaw's Cases & Codes
A free source of state and federal court opinions, state laws, and the United States Code. For more information about the legal concepts addressed by these cases and statutes, visit FindLaw's Learn About the Law.