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(a) Hazardous condition.--If a domestic society has an authorized control level event, under circumstances the commissioner determines will not be promptly remedied, the commissioner may, in addition to all other actions required or permitted by this act and other applicable law, issue an order declaring the domestic society to be in hazardous condition and ordering that all steps be taken to remedy the condition in accordance with this section.
(b) Transfer of assets and liabilities.--
(1) Upon the commissioner's order, a domestic society may negotiate an agreement to transfer all members, certificates and other assets and liabilities of the domestic society to another fraternal benefit society or other insurer through merger, consolidation, assumption or other means. The following apply:
(i) The transfer shall be concluded within the time frame agreed to by the commissioner and subject to approval by the commissioner.
(ii) The transfer agreement shall be deemed fully approved by the domestic society upon majority vote of its board of directors, notwithstanding the provisions of section 2405, 1 any other law or regulation or the laws of the domestic society requiring notice to members or approval by two-thirds majority vote of the supreme governing body, which shall be suspended by this section.
(iii) The domestic society shall provide notice to its members of the transaction not later than 30 days after approval by the commissioner.
(2) The board of directors of a domestic society may suspend or modify the qualifications for membership in the domestic society as necessary to facilitate a transfer under this section, notwithstanding the laws of the domestic society or any law or regulation to the contrary.
(3) Upon the effective date of a transfer to an organization that is not a fraternal benefit society and in consideration for that transfer, each member of the society shall be deemed to agree that any terms of a certificate subjecting the certificate to the laws of the society or providing for the maintenance of the society's solvency, except to the extent of any outstanding assessment not released by the terms of the transfer, shall be null and void, and the assuming organization shall endorse the certificates accordingly.
(4) Each domestic society shall amend its laws to permit the transactions contemplated by this section, including suspending any provisions requiring notice to members or approval of the supreme governing body with respect to the transfer of its certificates if the society has an authorized control level event and the transfer is approved by the commissioner.
(c) Definitions.--As used in this section, the following words and phrases shall have the meanings given to them in this subsection unless the context clearly indicates otherwise:
“Authorized control level event.” As defined in section 501-A of the act of May 17, 1921 (P.L. 789, No. 285) 2, known as The Insurance Department Act of 1921.
Cite this article: FindLaw.com - Pennsylvania Statutes Title 40 P.S. Insurance § 991.2428. Solvency - last updated January 01, 2019 | https://codes.findlaw.com/pa/title-40-ps-insurance/pa-st-sect-40-991-2428/
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