§ 6732. — Redomestication of mutual insurers.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC6732]
TITLE 15--COMMERCE AND TRADE
CHAPTER 93--INSURANCE
SUBCHAPTER II--REDOMESTICATION OF MUTUAL INSURERS
Sec. 6732. Redomestication of mutual insurers
(a) Redomestication
A mutual insurer organized under the laws of any State may transfer
its domicile to a transferee domicile as a step in a reorganization in
which, pursuant to the laws of the transferee domicile and consistent
with the standards in subsection (f) of this section, the mutual insurer
becomes a stock insurer that is a direct or indirect subsidiary of a
mutual holding company.
(b) Resulting domicile
Upon complying with the applicable law of the transferee domicile
governing transfers of domicile and completion of a transfer pursuant to
this section, the mutual insurer shall cease to be a domestic insurer in
the transferor domicile and, as a continuation of its corporate
existence, shall be a domestic insurer of the transferee domicile.
(c) Licenses preserved
The certificate of authority, agents' appointments and licenses,
rates, approvals and other items that a licensed State allows and that
are in existence immediately prior to the date that a redomesticating
insurer transfers its domicile pursuant to this subchapter shall
continue in full force and effect upon transfer, if the insurer remains
duly qualified to transact the business of insurance in such licensed
State.
(d) Effectiveness of outstanding policies and contracts
(1) In general
All outstanding insurance policies and annuities contracts of a
redomesticating insurer shall remain in full force and effect and
need not be endorsed as to the new domicile of the insurer, unless
so ordered by the State insurance regulator of a licensed State, and
then only in the case of outstanding policies and contracts whose
owners reside in such licensed State.
(2) Forms
(A) Applicable State law may require a redomesticating insurer
to file new policy forms with the State insurance regulator of a
licensed State on or before the effective date of the transfer.
(B) Notwithstanding subparagraph (A), a redomesticating insurer
may use existing policy forms with appropriate endorsements to
reflect the new domicile of the redomesticating insurer until the
new policy forms are approved for use by the State insurance
regulator of such licensed State.
(e) Notice
A redomesticating insurer shall give notice of the proposed transfer
to the State insurance regulator of each licensed State and shall file
promptly any resulting amendments to corporate documents required to be
filed by a foreign licensed mutual insurer with the insurance regulator
of each such licensed State.
(f) Procedural requirements
No mutual insurer may redomesticate to another State and reorganize
into a mutual holding company pursuant to this section unless the State
insurance regulator of the transferee domicile determines that the plan
of reorganization of the insurer includes the following requirements:
(1) Approval by board of directors and policyholders
The reorganization is approved by at least a majority of the
board of directors of the mutual insurer and at least a majority of
the policyholders who vote after notice, disclosure of the
reorganization and the effects of the transaction on policyholder
contractual rights, and reasonable opportunity to vote, in
accordance with such notice, disclosure, and voting procedures as
are approved by the State insurance regulator of the transferee
domicile.
(2) Continued voting control by policyholders; review of
public stock offering
After the consummation of a reorganization, the policyholders of
the reorganized insurer shall have the same voting rights with
respect to the mutual holding company as they had before the
reorganization with respect to the mutual insurer. With respect to
an initial public offering of stock, the offering shall be conducted
in compliance with applicable securities laws and in a manner
approved by the State insurance regulator of the transferee
domicile.
(3) Award of stock or grant of options to officers and
directors
During the applicable period provided for under the State law of
the transferee domicile following completion of an initial public
offering, or for a period of six months if no such applicable period
is provided, neither a stock holding company nor the converted
insurer shall award any stock options or stock grants to persons who
are elected officers or directors of the mutual holding company, the
stock holding company, or the converted insurer, except with respect
to any such awards or options to which a person is entitled as a
policyholder and as approved by the State insurance regulator of the
transferee domicile.
(4) Policyholder rights
Upon reorganization into a mutual holding company, the
contractual rights of the policyholders are preserved.
(5) Fair and equitable treatment of policyholders
The reorganization is approved as fair and equitable to the
policyholders by the insurance regulator of the transferee domicile.
(Pub. L. 106-102, title III, Sec. 312, Nov. 12, 1999, 113 Stat. 1417.)
