(1) Any domestic mutual insurer may submit to the commissioner a petition and plan to convert, without reincorporation, into a domestic stock or other form of insurer pursuant to the requirements of this section.

(2) The petition and plan shall set forth with specificity the terms and conditions of the proposed conversion and shall do all of the following:

(a) Certify that the plan has been adopted by a majority vote of the board of directors of the insurer;

(b) Certify that the plan and the proposed conversion will not be prejudicial to the policyholders of the insurer;

(c) Specify the method and basis for the issuance of the capital stock of the converted stock or other form of insurer; and

(d) Provide copies of proposed amendments to the insurer's articles of incorporation and bylaws or other documents of organization to effectuate the conversion.

(3) The commissioner shall preliminarily approve the conversion after receiving the information provided in subsection (2) of this section.

(4) After receiving preliminary approval from the commissioner, the insurer shall do all of the following:

(a) Give notice, either personally or through mailing at least twenty-one days before the time fixed for the meeting, to the last known postal address of each policyholder that the question of the conversion will be voted upon at a regular or special meeting of the policyholders. Such notice shall fairly but briefly describe the proposed conversion plan.

(b) Approve the conversion plan and any necessary amendments to the insurer's articles of incorporation and bylaws or other documents of organization, at the regular or a special meeting held in pursuance of the call and notice, by the affirmative vote of not less than two-thirds of the policyholders voting in person or by proxy; and

(c) Submit the conversion plan, together with proper proof that it has been approved by the policyholders as provided in this section, to the commissioner for final approval. The conversion plan shall not become effective until the commissioner issues an amended certificate of authority to the petitioner.

(5) Upon the issuance of the amended certificate of authority, the conversion shall be effective and the mutual insurer shall immediately become a stock or other form of insurer rather than a mutual insurer. The conversion into a stock or other form of insurer shall not affect any suits, rights, or contracts of the mutual insurer. In all other respects the rights and properties of the mutual insurer shall continue to be the property of the resulting stock or other form of insurer, which shall remain bound by all the obligations and liabilities of the mutual insurer. The stock or other form of insurer shall be deemed to have been organized at the time the converted mutual insurer was originally organized.

(6) Notwithstanding the requirements of paragraphs (a) and (b) of subsection (4) of this section, in the event of insolvency of the insurer, its board of directors by a majority vote may, in its petition, request that the commissioner waive the requirements of notice to and approval by the policyholders before submitting the petition and plan of conversion. Such petition shall specify both of the following:

(a) The method and basis for the issuance of the converted insurer's shares of its capital stock or other indication of ownership to an independent party in connection with an investment by such independent party in an amount sufficient to restore the insurer to a sound financial condition; and

(b) That the conversion shall be accomplished without distribution to the past, present, or future policyholders, if the commissioner finds that the value of the insurer, due to insolvency, is insufficient to warrant any such distribution.

(7) If the commissioner, upon review of the plan of conversion and the financial examination, finds that the domestic mutualinsurer meets statutory requirements with respect to capital, surplus fund, and assets, the commissioner may, by a written order, waive the requirements of paragraphs (a) and (b) of subsection (4) of this section.

(8) A domestic mutual insurer may, by a majority vote of its directors and upon approval of the commissioner, abandon such plan for conversion at any time before the issuance of the final order of the commissioner. Upon such abandonment, all rights and obligations arising out of the plan shall terminate and the insurer shall continue to conduct its business as a domestic mutual insurer as though no such plan had ever been adopted.