17:48E-46. Conversion of health service corporation to domestic mutual insurer

2. A health service corporation which is organized pursuant to P.L.1985, c.236 (C.17:48E-1 et seq.) may convert to a domestic mutual insurer by complying with the provisions of sections 2 through 4 of this act.

a. The board of directors of a health service corporation shall adopt a resolution to become a domestic mutual insurer at a meeting of the board by a two-thirds affirmative vote of the total number of directors of the health service corporation. A copy of the minutes of the meeting at which that resolution is adopted shall be filed with the commissioner. The resolution shall include a plan for conversion to domestic mutual insurer, including a proposed certificate of incorporation and bylaws. The plan shall include:

(1) the purpose of the conversion;

(2) the effect of conversion on existing subscriber contracts issued by the health service corporation;

(3) a business plan;

(4) a provision that each policyholder shall receive any rights with respect to the mutual insurer as may be prescribed by the commissioner, provided that such rights shall not exceed the rights provided to policyholders of other domestic mutual insurers authorized to transact the business of health insurance;

(5) a provision that each policyholder shall be notified of the conversion, which notification process shall be approved by the commissioner; and

(6) a provision incorporating the recovery plan established pursuant to section 5 of P.L.1988, c.71 (C.17:48E-17.1).

b. No director, officer, agent or employee of any health service corporation shall receive any fee, commission, compensation or other valuable consideration for aiding, promoting or assisting in the conversion of the health service corporation to a domestic mutual insurer except as set forth in the plan for such conversion as required pursuant to subsection a. of this section and as approved by the commissioner.

L.1995,c.196,s.2.