§ 3442. Merger of mutual insurance company into an existing mutual insurance holding company; merger and acquisition by mutual insurance holding company or subsidiary of mutual insurance holding company

(a) Merger of mutual insurance company into mutual insurance holding company. A domestic or foreign mutual insurance company, upon the approval of the Commissioner, may reorganize by merging its policyholders' membership interests into a mutual insurance holding company formed pursuant to section 3441 of this title and continue the corporate existence of the reorganizing insurance company as a stock insurance company subsidiary of the mutual insurance holding company. A merger pursuant to this section shall be governed by the terms, conditions, and procedure set forth in section 3441 of this title.

(b) Merger and acquisition by mutual insurance holding company or subsidiary of mutual insurance holding company. Subject to applicable requirements of this chapter, a mutual insurance holding company may:

(1) merge or consolidate with, or acquire the assets of, a mutual insurance holding company reorganized pursuant to this act or any similar entity organized pursuant to the laws of any other state;

(2) either alone or together with one or more stock insurance holding companies as defined in subsection 3443(c) of this title, or other subsidiaries, directly or indirectly, acquire the stock of a stock insurance company or a mutual insurance company that reorganizes under this act or the law of its state of organization;

(3) together with one or more of its stock insurance company subsidiaries, acquire the assets of a stock insurance company or a mutual insurance company; or

(4) acquire a stock insurance company through the merger of such stock insurance subsidiary with a stock insurance company or stock insurance holding company.

(c) A merger or consolidation pursuant to subsection (b) of this section is subject to the standards and procedures prescribed in sections 3424 through 3434 of this title. Mutual insurance holding companies and stock insurance holding companies shall be considered insurers for purposes of application of such sections.

(d) No such merger or consolidation shall be effectuated unless in advance thereof, the plan and agreement therefor have been filed with and approved by the Commissioner. Such approval shall be given unless the Commissioner finds such plan or agreement:

(1) is inequitable to the policyholders of any insurer involved in the merger or the members of any mutual insurance holding company involved in the merger; or

(2) would substantially reduce the security of and service to be rendered to policyholders of an insurer involved in the merger or consolidation.

(e) A stock or asset acquisition pursuant to subsection (b) of this section shall be subject to the provisions of subsection 3443(c) of this title.

(f) The provisions of subsection 3441(b) of this title shall apply to any transaction under this section which involves the merger, consolidation, or acquisition of a mutual insurance company or mutual insurance holding company. (Added 1995, No. 167 (Adj. Sess.), § 29a; amended 1999, No. 86 (Adj. Sess.), § 4, eff. April 27, 2000.)