(1) A domestic mutual insurance company, by itself or together with one or more other mutual insurance companies, under a plan of reorganization, may reorganize as a mutual insurance holding company system that must consist of a mutual insurance holding company and one or more controlled subsidiaries and which may consist of one or more intermediate stock holding companies and other subsidiaries as permitted by Section 83-6-1 et seq. The reorganization may be effected by the organization of one or more companies, amendment or restatement of the articles of association and bylaws of one or more companies, transfer of assets and liabilities among two (2) or more companies, issuance, acquisition or transfer of capital stock of one or more companies or merger or consolidation of two (2) or more companies. On and after the effective date of a plan of reorganization, the mutual insurance holding company shall at all times own, directly or indirectly, a majority of the voting shares of each controlled subsidiary and any intermediate stock holding company.

(2) All of the initial shares of the capital stock of the insurance company which reorganized as a subsidiary insurance company shall be issued either to the mutual insurance holding company or to an intermediate holding company which is wholly owned by the mutual insurance holding company. This restriction does not preclude the subsequent issuance of additional shares of stock by an intermediate holding company or the subsidiary insurance company, subject to the approval of the commissioner and compliance with applicable law, so long as the mutual insurance holding company at all times owns directly or through one or more intermediate holding companies, a majority of the voting shares of the capital stock of the subsidiary insurance company. The membership interests of the policyholders of the subsidiary insurance company shall become membership interests in the mutual insurance holding company in accordance with the plan of reorganization. Policyholders of the subsidiary insurance company which was formerly the mutual insurer shall be members of the mutual insurance holding company in accordance with the plan of reorganization and the articles of association and bylaws of the mutual insurance holding company.