§ 3441. Formation of a mutual insurance holding company

(a) A domestic mutual insurance company, upon approval of the Commissioner, may reorganize by forming an insurance holding company based upon a mutual plan and continue the corporate existence of the reorganizing insurance company as a stock insurance company subsidiary of the mutual insurance holding company. The mutual insurance company shall file with the Commissioner the plan of reorganization, proposed amended and restated charters for the mutual holding company and the insurance company, and such other relevant information as the Commissioner shall require. The Commissioner shall, in accordance with section 3305 of this title, make a determination as to the general good of the proposed reorganization. The Commissioner may, in his or her discretion, conduct a single public hearing as provided by section 3305 of this title to consider the formation of the mutual holding company and stock insurance company. The Commissioner shall, within 90 days, approve any proposed mutual holding company formation unless the Commissioner finds:

(1) disapproval is necessary to prevent practices that will cause financial impairment to the mutual insurance company or proposed stock company;

(2) the financial or management resources of the mutual insurance company warrant disapproval;

(3) the mutual insurance company fails to furnish the information required by this section;

(4) the mutual insurance company fails to provide certified copies of the approval of its plan of reorganization by two-thirds of its board of directors; or

(5) the proposed reorganization would be unfair to policyholders.

(b) All of the initial shares of the capital stock of the reorganized insurance company shall be issued to the mutual insurance holding company or to a stock insurance holding company which is wholly owned by the mutual insurance holding company. The membership interests of the policyholders of the reorganized insurance company shall become membership interests in the mutual insurance holding company. Policyholders of the reorganized insurance company shall be members of the mutual insurance holding company in accordance with the articles of incorporation and bylaws of the mutual insurance holding company. The mutual insurance holding company shall at all times own, directly or indirectly, a majority of the voting shares of the capital stock of the subsidiary stock insurance company. For purposes of this subchapter, "stock insurance holding company" means a corporation at least a majority of the voting shares of which is owned, directly or through another stock insurance holding company, by a mutual insurance holding company and which holds, directly or indirectly, all the voting shares of the reorganized insurer.

(c) Reorganization of the domestic mutual insurance company shall be subject to approval of its members or policyholders in accordance with section 3427 of this title and dissenting members or policyholders may petition the Commissioner in accordance with section 3429 of this title, except the request for a hearing must be filed within 30 days of the giving of notice to policyholders of their right to dissent after the regular or special meeting of the policyholders at which the reorganization was approved; provided, however, that no notice is required to be sent to policyholders who voted in favor of the reorganization.

(d) Notwithstanding the provisions of subsection (a) of this section, the Commissioner, in his or her discretion, may disapprove any proposed mutual holding company formation if he or she determines that the proposal is contrary to the financial interests of the policyholders. (Added 1995, No. 167 (Adj. Sess.), § 29a; amended 1997, No. 54, § 12, eff. June 26, 1997; 1999, No. 86 (Adj. Sess.), §§ 2, 3, eff. April 27, 2000.)