Sec. 2. (a) At the effective date of the plan of conversion, assets adequate to satisfy a claim described in section 1 of this chapter, consisting of the consideration that otherwise would be distributed directly to eligible members, must be placed in trust under a trust agreement in a form approved by the commissioner. The trustee or trustees of the trust shall:

(1) be appointed by the board of directors of the converting mutual, subject to disapproval of any trustee by the commissioner; and

(2) consist of one (1) or more institutions authorized by Indiana law to act as corporate trustees.

(b) The beneficiaries of the trust:

(1) are the eligible members who, in the absence of the claims, would have been entitled to the consideration placed in the trust; and

(2) may consist of all of the eligible members or specified classes or groups of eligible members.

(c) Assets of the trust shall be made available to pay or otherwise satisfy the claims for which the trust has been established, the expenses of the trust in contesting or resolving those claims, and any other reasonable expenses of the trust. Upon final resolution of the claims, by judgment, settlement or otherwise, or at such other times as may be provided for in the trust agreement, the remaining assets of the trust shall be distributed to the beneficiaries in accordance with their respective interests in the trust.

(d) Until the trust has been terminated, the trustee or trustees shall prepare reports not less frequently than annually, upon termination of the trust, and at such other times as may be requested by the commissioner or the former mutual. The reports must contain information regarding the financial condition of the trust and the status of any resolved and pending claims. The reports shall be provided to the commissioner and the former mutual and the reports or summary reports shall be mailed at least annually to the beneficiaries of the trust at the expense of the trust.

(e) An interest in a trust established under this section does not constitute a security under Indiana law.

(f) The establishment of a trust or pendency of any claim described in this chapter shall not delay or affect the effectiveness of a plan of conversion or an amendment to the articles of incorporation.

As added by P.L.94-1999, SEC.3.