The meeting of subscribers prescribed by subdivision (c) of Section 1560.03 shall be called by the governing board, the chairperson of the board, or the president of the domestic reciprocal insurer. Notice of the meeting shall be given to eligible subscribers by mail at least 45 days prior to the date set for the meeting to subscribers of the domestic reciprocal insurer of record on the date the plan of conversion was adopted by the governing board. The notice shall be accompanied by an information statement describing the proposed reorganization. The information statement shall include, at a minimum, all of the following items:

(a) A full copy and summary of the plan of reorganization.

(b) A discussion addressing the reasons and purposes of the proposed restructuring, which shall include a comparison to a dereciprocalization.

(c) An analysis of the benefits and risks associated with the proposed reorganization to the reciprocal company and its policyholders.

(d) An explanation of how the restructuring will benefit policyholders, as well as a description of any potential risks to policyholder interests and a description of how the policyholders’ rights differ at the reciprocal holding company level from those in the existing company.

(e) A description of any stock issuance, including any shares or options to be issued to directors, officers, agents, employees, or employee benefit plans, for their benefit, that will be made in conjunction with the plan of conversion, if any, and the guidelines and parameters that shall apply in the event stock is to be issued, including a detailed discussion of subscription rights that are to be granted to policyholders.

(f) The converted insurer’s proposed articles of incorporation and bylaws.

(g) Any proposed articles and bylaws of the reciprocal holding company and any other entities to be created in the reorganization.

(h) Financial information.

(i) Any other information that the commissioner determines is necessary to make a complete and adequate disclosure to policyholders.

Voting shall be by ballot, in person, or by proxy. A quorum shall consist of 10 percent of the subscribers of the domestic reciprocal insurer entitled to vote at the meeting.

(Added by Stats. 1998, Ch. 421, Sec. 2. Effective January 1, 1999.)