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PAG LIN
1 1 Section 1. Section 521A.14, subsection 2, Code Supplement
1 2 1995, is amended by adding the following new paragraph:
1 3 NEW PARAGRAPH. c. A foreign mutual insurance company, or
1 4 a foreign health service corporation, which if a domestic
1 5 corporation would be organized under chapter 514, may
1 6 reorganize upon the approval of the commissioner and in
1 7 compliance with the requirements of any law or regulation
1 8 which is applicable to the foreign mutual insurance company or
1 9 foreign health service corporation by merging its
1 10 policyholders' or subscribers' membership interests into a
1 11 mutual insurance holding company formed pursuant to subsection
1 12 1 and continuing the corporate existence of the reorganizing
1 13 foreign mutual insurance company or reorganizing foreign
1 14 health service corporation as a foreign stock insurance
1 15 company subsidiary of the mutual insurance holding company.
1 16 The commissioner, after a public hearing as provided in
1 17 section 521A.3, subsection 4, paragraph "b", may approve the
1 18 proposed merger. The commissioner may retain consultants as
1 19 provided in section 521A.3, subsection 4, paragraph "c". A
1 20 merger pursuant to this paragraph is subject to section
1 21 521A.3, subsections 1, 2, and 3. The reorganizing foreign
1 22 mutual insurance company or reorganizing foreign health
1 23 service corporation may remain a foreign company or foreign
1 24 corporation after the merger, and may be admitted to do
1 25 business in this state. A foreign mutual insurance company or
1 26 foreign mutual health service corporation which is a party to
1 27 the merger may at the same time redomesticate in this state by
1 28 complying with the applicable requirements of this state and
1 29 its state of domicile. The provisions of paragraph "b" shall
1 30 apply to a merger authorized under this paragraph, except that
1 31 a reference to policyholders in that paragraph is also deemed
1 32 to include subscribers in the case of a health service
1 33 corporation.
1 34 Sec. 2. Section 521A.14, Code Supplement 1995, is amended
1 35 by adding the following new subsection:
2 1 NEW SUBSECTION. 7. The majority of the voting shares of
2 2 the capital stock of the reorganized insurance company, which
2 3 is required by this section to be at all times owned by a
2 4 mutual insurance holding company, shall not be conveyed,
2 5 transferred, assigned, pledged, subjected to a security
2 6 interest or lien, encumbered, or otherwise hypothecated or
2 7 alienated by the mutual insurance holding company or
2 8 intermediate holding company. Any conveyance, transfer,
2 9 assignment, pledge, security interest, lien, encumbrance, or
2 10 hypothecation or alienation of, in or on the majority of the
2 11 voting shares of the reorganized insurance company which is
2 12 required by this section to be at all times owned by a mutual
2 13 insurance holding company, is in violation of this section and
2 14 shall be void in inverse chronological order of the date of
2 15 such conveyance, transfer, assignment, pledge, security
2 16 interest, lien, encumbrance, or hypothecation or alienation,
2 17 as to the shares necessary to constitute a majority of such
2 18 voting shares. The majority of the voting shares of the
2 19 capital stock of the reorganized insurance company which is
2 20 required by this section to be at all times owned by a mutual
2 21 insurance holding company shall not be subject to execution
2 22 and levy as provided in chapter 626. The shares of the
2 23 capital stock of the surviving or new company resulting from a
2 24 merger or consolidation of two or more reorganized insurance
2 25 companies or two or more intermediate holding companies which
2 26 were subsidiaries of the same mutual insurance holding company
2 27 are subject to the same requirements, restrictions, and
2 28 limitations as provided in this section to which the shares of
2 29 the merging or consolidating reorganized insurance companies
2 30 or intermediate holding companies were subject by this section
2 31 prior to the merger or consolidation.
2 32 As used in this section, "majority of the voting shares of
2 33 the capital stock of the reorganized insurance company" means
2 34 shares of the capital stock of the reorganized insurance
2 35 company which carry the right to cast a majority of the votes
3 1 entitled to be cast by all of the outstanding shares of the
3 2 capital stock of the reorganized insurance company for the
3 3 election of directors and on all other matters submitted to a
3 4 vote of the shareholders of the reorganized insurance company.
3 5 The ownership of a majority of the voting shares of the
3 6 capital stock of the reorganized insurance company which are
3 7 required by this section to be at all times owned by a parent
3 8 mutual insurance holding company includes indirect ownership
3 9 through one or more intermediate holding companies in a
3 10 corporate structure approved by the commissioner. However,
3 11 indirect ownership through one or more intermediate holding
3 12 companies shall not result in the mutual insurance holding
3 13 company owning less than the equivalent of a majority of the
3 14 voting shares of the capital stock of the reorganized
3 15 insurance company. The commissioner shall have jurisdiction
3 16 over an intermediate holding company as if it were a mutual
3 17 insurance holding company. As used in this section,
3 18 "intermediate holding company" means a holding company which
3 19 is a subsidiary of a mutual insurance holding company, and
3 20 which either directly or through a subsidiary intermediate
3 21 holding company has one or more subsidiary reorganized
3 22 insurance companies of which a majority of the voting shares
3 23 of the capital stock would otherwise have been required by
3 24 this section to be at all times owned by the mutual insurance
3 25 holding company.
3 26 EXPLANATION
3 27 This bill amends section 521A.14, which relates to the
3 28 reorganization of a domestic mutual insurance company into a
3 29 mutual insurance holding company and continuing the corporate
3 30 existence of the reorganizing insurance company as a stock
3 31 insurance company.
3 32 Section 1 authorizes foreign mutual insurance companies or
3 33 certain foreign health service corporations to reorganize by
3 34 merging its policyholders' or subscribers' membership
3 35 interests, as applicable, into a mutual insurance holding
4 1 company in the same manner as a domestic mutual insurance
4 2 company.
4 3 Section 2 provides that the majority of the voting shares
4 4 of the capital stock of the reorganized insurance company,
4 5 which is required by this section to be at all times owned by
4 6 a mutual insurance holding company, shall not be conveyed,
4 7 transferred, assigned, pledged, subjected to a security
4 8 interest or lien, encumbered, or otherwise hypothecated or
4 9 alienated by the mutual insurance holding company or
4 10 intermediate holding company. Any such transaction in or on
4 11 the majority of the voting shares of the reorganized insurance
4 12 company which is required to be owned by the mutual insurance
4 13 holding company, is in violation of the section and is void in
4 14 inverse chronological order of the date of such transaction as
4 15 to the shares necessary to constitute a majority of such
4 16 voting shares. The bill provides that the ownership of a
4 17 majority of the voting shares of the capital stock of the
4 18 reorganized insurance company which are required by this
4 19 section to be at all times owned by a parent mutual insurance
4 20 holding company includes indirect ownership through one or
4 21 more intermediate holding companies in a corporate structure
4 22 approved by the commissioner.
4 23 LSB 4250SC 76
4 24 mj/jj/8
Text: SSB02223 Text: SSB02225 Text: SSB02200 - SSB02299 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
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