CONVERSION OF MUTUAL INSURERS
403-B:3 Procedure for Conversion.
I. An insurer may apply to the commissioner for conversion pursuant to this chapter by filing with the commissioner a plan of conversion adopted by 2/3 of the entire board of directors, which shall contain the following:
(a) The proposed articles of incorporation and bylaws to be adopted by the insurer upon its conversion to a stock insurance company.
(b) A statement of the manner of treating holders of surplus notes, if any notes are outstanding.
(c) Provisions for distribution of the conversion value in accordance with RSA 403-B:4.
(d) Provisions stating the manner and basis of exchanging the equitable share of each eligible policyholder for securities of the stock insurance company into which the insurer is to be converted, and the disposition of any unclaimed shares.
(e) The effective date of the plan of conversion or the method of determination of such effective date.
(f) Such other information as the commissioner may reasonably require.
II. The commissioner may retain at the insurer's expense such attorneys, actuaries, accountants, appraisers and other experts as shall be reasonably necessary to assist in the review of the insurer's plan of conversion.
III. Within 60 days after receipt of the completed plan of conversion the commissioner shall hold a hearing, written notice of which shall be given to the insurer not less than 30 days in advance of the hearing. Within 15 days after receiving the notice of hearing, the insurer shall notify eligible policyholders. Notice of such hearing shall be made at the expense of the insurer by mail to eligible policyholders, which notice shall include a copy of the plan of conversion or a summary of such plan approved by the commissioner.
IV. At the hearing, the insurer and any eligible policyholders shall have the right to appear and to present evidence, orally and in writing.
V. Within 30 days after the conclusion of the hearing, the commissioner shall approve the plan of conversion, unless the commissioner finds:
(a) The plan of conversion is unfair or inequitable to policyholders;
(b) The plan of conversion will cause the insurer to become unable to fulfill its contractual obligations;
(c) After the conversion of the insurer the stock insurance company would not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed;
(d) The financial condition of the insurer would be such as might jeopardize the financial stability of the converted stock insurance company, or prejudice the interest of its policyholders;
(e) The competence, experience and integrity of those persons who would control the operation of the stock insurance company are such that it would not be in the interest of policyholders of the insurer and of the public to permit conversion; or
(f) The plan of conversion does not comply with the provisions of this chapter.
VI. Upon approval by the commissioner, the plan of conversion shall be submitted to a vote of eligible policyholders. The board of directors shall schedule a meeting to be held for such purpose, and shall provide at least 10 days' prior written notice to eligible policyholders. Notice to eligible policyholders shall contain a copy of the plan of conversion and such other information as the commissioner may require. The notice of such meeting may be sent prior to the commissioner's approval, provided the notice clearly states that the plan of conversion is subject to such approval. The vote of 2/3 of the eligible policyholders voting in person or by proxy shall be necessary for the adoption of the plan of conversion.
VII. At any time prior to the date of the vote of eligible policyholders, the plan of conversion may be withdrawn or amended by majority vote of the entire board of directors, except that no amendment which materially changes the plan of conversion shall take effect unless such amendment is approved by the commissioner and eligible policyholders in accordance with the same conditions and procedures applicable to the original plan of conversion.
VIII. Upon adoption of the plan of conversion by the eligible policyholders, the commissioner shall certify his approval of the plan of conversion by an endorsement upon the articles of incorporation, which may then be recorded in accordance with the provisions of RSA 293-A, provided that copies of the original documents filed with the secretary of state shall also be filed with the commissioner.
Source. 1992, 288:16, eff. May 18, 1992.