644.02 Definitions.

(1) In this chapter, unless the context otherwise requires:

(a) “Board" means the board of directors or board of trustees, as the case may be, of the converting insurance company.

(b) “Converted insurance company" means an insurance company that converted under this chapter from a mutual insurance company to a stock insurance company, or from a service insurance corporation to a mutual insurance company and then to a stock insurance company, and formed a mutual holding company.

(c) “Converted life insurance company" means a life insurance company that converted under this chapter from a mutual life insurance company to a stock insurance company and formed a mutual holding company.

(d) “Converting insurance company" means a domestic mutual insurance company or a domestic service insurance corporation undergoing restructuring under this chapter.

(e) “Dividend plan" means a plan to provide reasonable assurances as to the policyholder dividend scales of the participating individual policies and contracts of a converted insurance company in the life insurance business in force on the date specified in the dividend plan for which the insurer had an experience-based dividend scale payable in the year of the plan by creating any of the following:

1. Covenants of the converted insurance company or the mutual holding company, or both.

2. One or more closed blocks. Assets of the converted insurance company shall be allocated to the closed block in an amount that produces cash flows, together with anticipated revenues from the closed block business, expected to be sufficient to support the closed block business, including provision for payment of claims and those expenses and taxes specified in the dividend plan, and provision for continuation of the dividend scales in effect on the effective date of the restructuring under this chapter if the experience underlying such dividend scales continues. Any plan under this subdivision may provide for conditions under which the converted insurance company may cease to maintain any closed block and for the allocation of assets to that closed block.

3. A combination of subds. 1. and 2. or any other means of providing reasonable assurances that the commissioner approves.

(f) “Dividend scales" means the equitable apportionment of divisible surplus by the board.

(g) “Divisible surplus" means the annual distribution described in s. 632.62 (4) (b) as a payment made to policyholders as determined by the board.

(h) “Intermediate stock holding company" means a corporation that satisfies all of the following:

1. The corporation was incorporated under ch. 180.

2. At least 51 percent of the corporation's voting stock is held directly or indirectly by a mutual holding company.

3. The corporation holds directly or indirectly at least 51 percent of the voting stock of a converted insurance company.

(i) “Member" means any of the following:

1. For a converting mutual insurance company, a policyholder who, by the records of the converting insurance company and by its articles of incorporation and bylaws, is a holder of a membership interest in the converting insurance company.

2. For a converting service insurance corporation, a policyholder shown on the books and records of the converting insurance company on the effective date of the restructuring.

(j) “Membership interests" means the voting rights of a member arising under the statutes and the articles of incorporation and bylaws of the converting insurance company, including the right to vote for the board and the right to vote on any plan of conversion, voluntary dissolution or amendment of the articles of incorporation. On and after the effective date of the restructuring, “membership interests" means the voting rights of a member arising under the statutes and the articles of incorporation and bylaws of the mutual holding company, including the right to vote for the board and the right to vote on any plan of conversion, voluntary dissolution or amendment of the articles of incorporation. “Membership interests" does not include members' rights in surplus, if any.

(k) “Mutual holding company" means a mutual insurance holding company.

(L) “Policyholder" means the person identified in the records of the converting insurance company or the converted insurance company under s. 611.51 (9) (c).

(m) “Rights in surplus" means any rights of a member arising under the converting insurance company's articles of incorporation or ch. 611 to a return of the surplus in respect of policies or contracts of the converting insurance company that may exist with regard to the surplus not apportioned or declared by its board as divisible surplus, including rights of members to a distribution of such surplus in dissolution or conversion proceedings under ch. 611. On and after the effective date of the restructuring, “rights in surplus" means any rights of a member of the mutual holding company arising under its articles of incorporation or this chapter to the net worth of the mutual holding company, including rights of members of the mutual holding company to a distribution of any portion of the net worth of the mutual holding company in conversion proceedings under s. 644.25 or dissolution proceedings under s. 644.28 or 644.29. “Rights in surplus" shall not include any right to divisible surplus expressly conferred solely by the terms of an insurance policy or annuity contract.

(n) “Voting stock" means stock of any class or any ownership interest having voting power for the election of directors, trustees or management. All references to a specified percentage of voting stock shall mean stock having the specified percentage of the voting power for the election of directors, trustees or management, including stock having such power only by reason of the happening of a contingency.

(2) Except when inconsistent with the definitions given in this chapter, the definitions of ss. 600.03 and 610.01 apply to this chapter. In the provisions of chs. 181 and 611 that are made applicable to this chapter or incorporated into this chapter by reference, all of the following apply:

(a) “Corporation" includes a mutual holding company formed under this chapter.

(b) “Department" means the commissioner.

(c) “Mutual" includes a mutual holding company.

(d) “Nonassessable mutual" includes a mutual holding company.

(e) “Policyholder" includes a member.

(f) “This chapter" includes this chapter.

History: 1997 a. 227.