(1) The voting shares of the capital stock of a subsidiary insurance company, which are required by Sections 83-31-145 through 83-31-181 in order to maintain a majority of the voting shares, are to be at all times owned by a mutual insurance holding company or one or more intermediate holding companies and the voting shares of the capital stock of any intermediate holding company, which are necessary to satisfy such ownership requirement through indirect ownership, shall not be conveyed, transferred, assigned, pledged, subjected to a security interest or lien, encumbered or otherwise hypothecated or alienated by the mutual insurance holding company or any intermediate holding company, except with the prior approval of the commissioner. Any conveyance, transfer, assignment, pledge, security interest, lien, encumbrance or hypothecation or alienation of, in or on such voting shares of capital stock is in violation of this section and shall be void in inverse chronological order of the date of such conveyance, transfer, assignment, pledge, security interest, lien, encumbrance or hypothecation or alienation as to such shares of capital stock. The shares of the capital stock of the surviving or new company resulting from a merger or consolidation of two (2) or more subsidiary insurance companies or two (2) or more intermediate holding companies which were subsidiaries of the same mutual insurance holding company are subject to the same requirements, restrictions, and limitations as provided in this section to which the shares of the merging or consolidating former mutual reorganized insurance companies or intermediate holding companies were subject by this section before the merger or consolidation.

(2) Upon approval of the commissioner and compliance with applicable law, an intermediate holding company or a subsidiary insurance company may issue to the mutual insurance holding company and to other persons securities, including voting stock, nonvoting stock and securities convertible into voting or nonvoting stock, if, after giving effect to such issuance, in the aggregate, the issued and outstanding voting stock of the intermediate holding company or the subsidiary insurance company held directly or indirectly by the mutual insurance holding company is not less than a majority of the voting shares of capital stock of such intermediate holding company or subsidiary insurance company. For purposes of this limitation, any issued and outstanding securities of an intermediate holding company or subsidiary insurance company that are convertible into voting stock shall be considered issued and outstanding voting stock. Upon approval of the commissioner and compliance with applicable law, an intermediate holding company or a subsidiary insurance company may issue any such securities: (a) to policyholders of a subsidiary insurance company in accordance with a subscription offering containing such terms, conditions and limitations as are approved by the board of directors of such intermediate holding company or subsidiary insurance company and the mutual insurance holding company; (b) in a public offering; or (c) in a private placement, including, without limitation, to one or more purchasers who are holders of surplus notes or other securities of a subsidiary insurance company, have or will have a lending, pooling or reinsurance arrangement with a subsidiary insurance company, have or will have an insurance, marketing, investment, support or other cooperative arrangement or affiliation with the subsidiary insurance company or are an affiliate of any entity which has such a relationship.