403-F:4 Plan of Reorganization. –
I. A plan of reorganization shall include the following provisions:
(a) A description of the structure of the mutual insurance holding company system.
(b) A description of the qualifications for membership in and the rights of members of the mutual insurance holding company.
(c) A description of the corporate restructuring and other transactions, and the parties to such transactions, that will effect the reorganization, including the organization of companies, amendment or restatement of articles of incorporation or bylaws, mergers, consolidations, and transfer and assumption of policies, contracts, assets, and liabilities.
(d) The reasons and purposes of the proposed restructuring, including an analysis of alternative transactions considered.
(e) An analysis of the benefits and risks associated with the proposed reorganization to the mutual insurance company.
(f) An explanation of how the restructuring will benefit policyholders, as well as a description of any potential risks to policyholder interests.
(g) A complete disclosure of all anticipated transaction costs, including:
(1) Any changes to director or management compensation or compensation plans; and
(2) The issuance or sale, to officers or directors, of shares or options to purchase shares of stock of any corporate member of the mutual insurance holding company system.
(h) All amendments to the mutual insurance company's articles of incorporation to address the restructuring from a mutual to a stock insurer.
(i) The proposed articles of incorporation and bylaws of the mutual insurance holding company and any other entities to be created in the restructuring.
(j) If applicable, a description of rights of policyholders in any initial stock offering.
(k) If applicable, a description of any plans for sale of stock to third parties, including:
(1) A statement of intent to conduct an initial sale of voting stock within a specified time after the effective date of the restructuring;
(2) A description of the maximum percentage of stock to be sold;
(3) A description of the process to be used in offering the stock and setting the initial sale price for the stock;
(4) A description of the rights of members to subscribe to the stock offering; and
(5) A description of any limitations on management participation in the stock offering and ownership.
(l) Any other documents filed with other regulatory bodies relating to the reorganization.
(m) In the case of a mutual life insurer, provisions for the establishment, for policyholder dividend purposes only, of a closed block. The closed block will consist of all of the participating individual policies of life insurance of the mutual life insurer in force on the effective date of the plan for which the insurer had an experience-based dividend scale payable in the year in which the plan is adopted. Assets of the insurer 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 (1) to support the closed block business, including payment of claims and those expenses and taxes specified in the plan and (2) to provide for continuation of dividend scales in effect on the adoption date if the experience underlying the scales continues, and for appropriate adjustments in the scales if the experience changes. The plan may provide for conditions under which the converted insurer may cease to maintain the closed block and its allocated assets. Regardless of such a cessation, the obligation under the policies constituting the closed block business remain the obligations of the converted insurer. Dividends on those policies shall be apportioned by the board of directors of the converted insurer in accordance with the terms of the policies.
II. A plan of reorganization must be adopted by 2/3 of the board of directors of the mutual insurance company.
III. Upon the adoption of a plan of reorganization the mutual insurance company shall submit to the commissioner the following:
(a) The plan of reorganization.
(b) The form of notice to be sent to eligible policyholders, informing them of their right to vote on the plan of reorganization.
(c) The form of proxy statement to be sent to eligible policyholders, informing them of their right to vote by proxy on the plan of reorganization, and describing the plan.
(d) The form of proxy to be sent to eligible policyholders to solicit their vote on the plan of reorganization.
(e) Proposed articles of incorporation, merger, or consolidation, restatements of or amendments to articles of incorporation or bylaws, and plans of merger or consolidation, with respect to each entity to be organized, reorganized, or otherwise subject to such action under the plan of reorganization.
(f) Such other information as the commissioner may reasonably require.